Chrysler shuts down all production

NEW YORK (CNNMoney.com) — Chrysler LLC announced late Wednesday that it is stopping all vehicle production in the United States for at least a month.

All 30 of the carmaker’s plants will close after the last shift on Friday, and employees will not be asked to return to work before Jan. 19.

Chrysler blamed the “continued lack of consumer credit for the American car buyer” for the slow-down in sales that forced the move.

The company ordinarily shuts down operations between Dec. 24 and Jan. 5. This closure would add roughly two weeks to that shutdown.

Chrysler is the second major automaker to suspend operations for January. Last week, General Motors announced it was idling 30% of its North American manufacturing capacity during the first quarter of 2009 in response to deteriorating market conditions. That move will take 250,000 vehicles out of production.

Chrysler would not say how many fewer vehicles would be produced because of this shutdown. A total of 46,000 employees will be affected. They will be paid during the time off through a combination of state unemployment benefits and Chrysler contributions, but they will not receive the full amount of their working pay, a Chrysler spokesman said.

“Chrysler dealers confirmed to the company at a recent meeting at its headquarters, that they have many willing buyers for Chrysler, Jeep and Dodge vehicles but are unable to close the deals, due to lack of financing,” the carmaker said in an announcement. “The dealers have stated that they have lost an estimated 20% to 25% of their volume because of this credit situation.”

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