High Stakes Poker?
Chrysler Idles Plants for a Month; GM Halts Volt Engine Factory
Chrysler LLC, awaiting a federal rescue as its cash dwindles, will shut all 30 of its plants for at least a month starting Dec. 19 as unsold cars and trucks pile up at showrooms.
Production won’t resume until Jan. 19 at the earliest, Chrysler said today in a statement. General Motors Corp., also waiting for word on U.S. loans, said a new factory making engines for the Chevrolet Volt electric car is being delayed to conserve cash.
The cutbacks showed how far the automakers are going to save money and prune output as plunging sales threaten their ability to stay in business. Both companies say they may run out of operating funds in just weeks without emergency U.S. aid.
Not sure if this is posturing, reality, or a union negotiating strategy.
Whatever it is, throw in the Armageddon ads they are running and you have the pressure on the bailout ratcheted up a wee bit.
Interesting development… Ontario next?
photo credit: Lawrence Whittemore
December 17th, 2008 at 5:47 pm
Nothing dramatic here, actually. When there is excess capacity, they shut down plants for a week, or two, or three. It is very common, especially this time of year. In fact, attaching a lay-off to Christmas gives them extra time to do some re-tooling work if they are so inclined (which they probably aren’t right now).
At Chrysler’s Brampton plant we have known for about a month that we weren’t returning for two weeks after Christmas. It is the third year in a row we have had January lay-offs, and two years ago we were off three weeks after Christmas. What to watch for is more weeks being added on. Those words in the article, “will shut all 30 of its plants for at least a month” that is the important point. If they extend that lay-off into five, six or more weeks that is unusual.
December 17th, 2008 at 7:12 pm
Even Dopey Dalton conceded today that this bailout is only the first of many. Once the auto companies get their paws on this money they know they will have the government over a barrel: “Either give us more or you’ll look like idiots when we cease operations and you lose the first chunk of bailout cash.” Dalton doesn’t care. He’s only interested in his political career. I care, It’s my money.
Surely everyone has seen what the banks have done with all the assistance they got…nada, zilch, zero, nothing. Where is this easing of the credit markets? Has anyone seen it? The banks will sit on their hands with a good looking balance sheet since the taxpayer now holds most of the loans, good and bad, that the banks have accrued. They will continue to do so while they let the spread in what they pay the Bank of Canada for money and what they charge to lend it grow. When they have repaid all their stockholder losses and fattened their bottom line they may condescend to start lending small amounts again. And, what the auto companies see the banks getting away with, only encourages them to use whatever pressure tactics they can bring to bear so they too, can pillage the taxpaying public.