Chrysler To Close All 30 Plants For A Month

[Supa Dexta]

Chrysler LLC said Wednesday that it is closing all 30 of its manufacturing plants for a month starting Friday as it seeks to counter the most severe downturn in U.S. auto sales in more than two decades.

http://cbs2.com/business/chrysler.cl....2.889762.html

[Xtrema]

Just a month? Why not 3 months as they have 117 days of supplies out there already.

You think car deals now are good, wait til February. It should be insane.

[Gibson]

Isn't Toyota doing this as well?

[Supa Dexta]

Sucks right before xmas.. I know I wouldnt want one of the cars built in the next 2 days.

[schocker]

Now how will I be able to order my new sebring!

fairly good idea though, maybe design a couple cars in the off time

[Redlyne_mr2]

Originally posted by Gibson
Isn't Toyota doing this as well?

Every manufacturer is, the imports are generally doing it for a couple of days.

[kaput]

.

[Xtrema]

Originally posted by kaput


They supposedly have lots of interested buyers but 25% of them can't get financing anymore. I'm not sure if that means they will lower prices any more or not.

http://www.autoblog.com/2008/12/17/c...-a-full-month/

My math is if they have 4 months of supply sitting around, and say Chrysler is selling say 1M cars a year (I know it's more but too lazy to search). That 333000 cars collecting dust.

Say if they liquidate them at $10,000 each, regardless what model. Chrysler can recover about $3B dollar to keep the company running for a reasonable amount of time. Clear stock and factory can start again. And if they give them away @ 50% off, I'm sure they will recover more than $3B.

I know not everyone will want a Chrysler but I'm sure a lot of people with older cars probably will jump at that just to have a newer ride.

[kaput]

.

[hampstor]

Originally posted by kaput
Is it really that simple though? How much does Chrysler owe on each vehicle? They would be taking a further loss on each vehicle that sold and wouldn't that put them in an even worse positon?

If they sold them for significant losses on each, it would be nothing more than than dumping. It will significantly devalue those models (for the owners that currently own them) and other significantly disrupt the market price of all vehicles in any class Dodge/Chrysler competes in. GM, Ford, Toyota, Honda, Nissan, etc. would all have to take some kind of action in order to be able to compete.

Not to mention, they've set the expectation for price on their vehicles and have devalued their brandname as a whole. Setting a precedent for selling at a loss as a business model is not sustainable.

[Supa Dexta]

It wouldnt keep them alive longer, they already owe suppliers the money that they would "make" from doing that... From what I've read they haven't been paying a lot of bills, and the ones they have, they've only been making partial payments.

[Xtrema]

Originally posted by kaput
Is it really that simple though? How much does Chrysler owe on each vehicle? They would be taking a further loss on each vehicle that sold and wouldn't that put them in an even worse positon?

VS how much would it cost on storage?

The one sitting collect dust are probably ones that been either paid and still paying on. The dump job will take market share away from competitors when the pickings are already slim. The car worth nothing being on the lot. May as well turn me into money and try to keep the boat afloat.

Plus having more car sold will keep dealerships alive with more service jobs.

Originally posted by hampstor


If they sold them for significant losses on each, it would be nothing more than than dumping. It will significantly devalue those models (for the owners that currently own them) and other significantly disrupt the market price of all vehicles in any class Dodge/Chrysler competes in. GM, Ford, Toyota, Honda, Nissan, etc. would all have to take some kind of action in order to be able to compete.

Not to mention, they've set the expectation for price on their vehicles and have devalued their brandname as a whole. Setting a precedent for selling at a loss as a business model is not sustainable.

But it will work as a last ditch gamble to force someone to buy Chrysler out to stop it from dumping.

Just like Rogers bought Fido to stop its unlimited plans.

[hampstor]

Originally posted by Xtrema




But it will work as a last ditch gamble to force someone to buy Chrysler out to stop it from dumping.

Just like Rogers bought Fido to stop its unlimited plans.

Rogers was in a better position than GM/Ford/Nissan/Toyota/Honda is right now in regards to cash on hand to purchase a major direct competitor. Rogers didn't buy Fido to stop the unlimited plans, they wanted the subscribers. Subscribers = recurring revenue. Not to mention, Fido was leasing Rogers infrastructure.

Look at Chrysler, any direct competitor that would buy them to stop any dumping faces an incredible amount of duplication between their own resources and those that belong to Chrysler. The only companies that would consider buying Chrysler are companies that want an easy way into the North American market and access to vehicles/technology that their existing lineup does not have.

[benyl]

Deflation, here we come!