Ailing US automaker Chrysler has said it is halting its manufacturing for at least a month in response to a credit crisis and ongoing debate on a government rescue for the sector.
‘As a result of the financial crisis, the automotive market remains depressed due to the continued lack of consumer credit for potential buyers,’ the Detroit firm said in a statement.
Chrysler said the shutdown of its plants is part of an effort to keep production and dealer inventory aligned with US market demand.
As a result, all Chrysler manufacturing operations will be idled at the end of the shift on Friday 19 December and employees will not return to work any sooner than 19 January 2009.
Chrysler said it informed the United Auto Workers union, employees and suppliers about the actions.
The company said that dealers have indicated many willing buyers for Chrysler, Jeep and Dodge vehicles but have been unable to close the deals, due to lack of financing.
The news came a day after the White House warned that the US auto industry would have to make concessions to win a government bailout.
General Motors and Chrysler are believed to be on the brink of collapse.
The Big Three US automakers, GM, Ford and Chrysler, have warned that without a package of loans, millions of jobs could be lost, which they say would send ripple effects through the nation's already faltering economy.
GM said last week it was idling 30% of its North American production in response to rapidly deteriorating market conditions.
