DETROIT – Chrysler LLC says it will indefinitely close one Missouri plant and cut production at another due to slumping demand for minivans and pickup trucks.
Officials with the Auburn Hills-based automaker said Monday in a conference call that it will shutter the St. Louis South plant, which makes minivans, effective Oct. 31. The St. Louis North plant, which makes full-size pickup trucks, will reduce operations from two shifts to one.
A slowing economy and gasoline prices above US$4 per gallon have cut U.S. car sales. Those who are buying are picking more fuel-efficient models.
Last week, Chrysler said it would add multiple weeks to the normal summer shutdowns for at least three pickup truck and sport utility vehicle factories.
The company told workers in a memo on Wednesday that the Toledo North Assembly Plant, which makes the Jeep Liberty and Dodge Nitro midsize SUVs, will be shut down for seven weeks from July 7 through the week of Aug. 18 due to sagging sales.
The Newark, Del., Assembly Plant, which makes the Dodge Durango and Chrysler Aspen SUVs, was shut down starting Monday for five weeks, with workers scheduled to return Aug. 4, and the Warren truck plant, which makes the Dodge Ram pickup, will close for five weeks in late June and July, according to union officials.
Although the company’s Canadian operations haven’t been affected by the latest actions, many of their vehicles are sold in the United States.
Chrysler has a minivan plant in Windsor, Ont., where it employs about 5,784 people. In addition, Chrysler Canada employs 4,130 at its car assembly plant in Brampton, Ont., and 451 at a casting plant in Toronto.
Chrysler president and vice-chairman Tom LaSorda said the company has no plans to reopen the St. Louis minivan plant. He added demand for minivans is only three shifts, so the company has no need to operate two factories.
“We see no need for the capacity in the future,” LaSorda said.
General Motors Corp. and Ford Motor Co. already have announced cuts due to the latest market downturn.
In fact, GM Canada’s plan to close its pickup plant in Oshawa, Ont. next year sparked a week-long blockade by angry union workers who said the company had committed as recently as May to keep the Oshawa truck plant open during the life of the new three-year contract, which runs until September 2011.
LaSorda denied media reports that Chrysler’s new owners, Cerberus Capital Management LP, had plans to sell the company in pieces.
“Hogwash, absolutely not being considered at all,” LaSorda said. “Absolutely no relevance. I don’t even want to entertain those questions.”
LaSorda said the private company is meeting or exceeding its financial targets but “this environment is forcing us to make some very difficult decisions.”
-with a file from The Canadian Press