Chrysler is stopping all auto production for at least a month, effective tomorrow. General Motors and Ford are going for longer holiday furloughs than usual. Ford added a third week to its holiday shutdown. GM is shutting over 20 auto plants for at least part of Q1 next year. Altogether 59 factories in North America will stop making cars at least temporarily. Affected directly: about 100,000 workers. UPDATE: furloughed workers receive unemployment pay nearly equal to their salary. No overtime of course.
How ugly is auto market? Mostly dealers have stopped selling many new vehicles and lenders have stopped lending to buy new cars.
GMAC is the GM financing arm and it's been trying to get some of the federal bail-out money. So far: nada.
Opinion polls have confirmed that most buyers are not eager to buy cars from a manufacturer that may be going broke. Warranties, parts, etc. etc.
How bad are 2008 car sales? GM's down 22% from last year. Ford: 19%. Chrysler: 28%. Overall car sales are down 16% in the U.S. but in recent months new car sales have been off closer to 35%. Some collateral damage that could be in the offing: auto parts suppliers are apparently already owed $13-billion by the Detroit Shrinking Three.
Meanwhile, the White House is pondering its actions to keep GM and Chrysler from instant liquidation. Of course,the nasty truth is nobody's buying anyway. And the first all-electric car to be built [since 2005] by the Detroit Shrinking Three may not make it to market.
PULLING THE PLUG ON THE ELECTRIC CHEVY VOLT?
Volt. Courtesy General Motors.
GM has stopped construction on a Flint, Michigan, factory that would make motors for the planned plug-in electric Chevy Volt to launch in 2010. Apparently GM says it has plans to carry on with its hopeful Volt regardless of what happens in Washington D.C. Chevy could presumably buy the needed Volt parts from foreign suppliers, making the Flint factory unnecessary.