Car maker closes factories for month

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Struggling US car maker Chrysler will close all 30 of its manufacturing plants for a month starting tomorrow.

The company needs to match production to slowing demand and conserve cash, the motoring giant said.

Chrysler said tighter credit markets were keeping would-be buyers away from their showrooms.

Dealers are unable to complete sales for buyers due to a lack of financing, and estimate that 20 to 25 per cent of their volume has been lost due to the credit situation.

Chrysler claims it is nearing the minimum level of cash it needs to run the company and will have trouble paying bills early in the New Year

Operations at the 30 plants will be idled at the end of shift tomorrow, and will not come back online until January 19 or later.

Ford also said it will close 10 of its North American assembly plants for an extra week in January due to the slumping car market.

Spokeswoman Angie Kozleski said the normal two-week holiday shutdown will be extended to January 12 at all operating assembly plants except those in Claycomo, Missouri, near Kansas City and the Dearborn, Michigan, lorry plant.

Those two plants will return to work as normal on January 5. Both make the new F-150 pick-up truck, while Claycomo also makes the Ford Escape and Mercury Mariner.

Last week, General Motors announced it was shutting down 30 per cent of its North American production.

Chrysler, Ford and General Motors have warned that millions of jobs could be lost if the government does not agree to a package of loans to support the industry.

US car sales have dipped to their slowest rate in 26 years.

The Bush administration is considering ways to help the car makers after Congress failed to reach a deal on 14 billion dollars (£9 billion) in loans for GM and Chrysler. Ford has applied for a 9 billion (£5.8 billion) credit, but says it has enough cash to make it through 2009.

Funding for the loans is expected to come from the 700 billion dollar (£450 billion) Wall Street rescue fund, but many Republicans have objected.

Chrysler spokesman Dave Elshoff said four plants will be temporarily closed beyond January 19: two plants in Toledo, Ohio, and one each in Ontario and Detroit.

Toledo North, which makes the Dodge Nitro and Jeep Liberty, and Toledo Supplier Park, which makes the Jeep Wrangler, will be closed until January 26.

The Windsor, Ontario, plant, which makes small vans, and Detroit's Conner Avenue plant, which makes the Dodge Viper roadster, will be closed until February 2, Mr Elshoff said.

Chrysler sales were down 47 per cent last month and are 28 per cent down through the first 11 months of the year.

Ford's US sales were down 31 per cent in November and are 20 per cent down in the first 11 months of the year.

Laid-off workers at Ford and Chrysler get holiday pay for the normal shutdown, then will receive unemployment benefits and supplemental pay from the company that total about 85 per cent of their normal pay.

General Motors said last week it will temporarily close 20 factories across North America and make sweeping cuts to its vehicle production. Many of those plants will be shut down for the entire month of January.

GM said it was delaying construction of a new engine factory in Flint, Michigan, in an effort to conserve cash.