Chrysler LLC suspends US production for at least a month. Could this be an indication that indeed the company and the other two big auto companies are bleeding inside?
In a report posted over at CNN.com, the 30 plants of the company will close after the last shift on Friday and the employees were told not to return to work before January 19 next year. In this latest move, the company put the blame on the continued lack of consumer credit for the American car buyer for the continued downward spiral movement of the sales not just for Chrysler but for other auto companies. Normally, the company shuts down its operation starting December 24 and will usually lasts til January 5. But this time, circumstances are different.
Chrysler LLC is not the only automaker that has decided to suspend operations for the first month next year. General Motors also announced last year that it will be idling 30 percent of its North American plants for the first quarter of 2009. Ford also made a move and indicated thru a spokeswoman that the company is adding a week to its normal two-week seasonal and normal shutdown.
Hours after the Senators ended the life of the bailout for the auto industry, the Bush administration has announced that it might use the taxpayers money supposedly to bail out the banks in order to keep the automakers out of trouble. This announcement basically reverses the previous stand on how to help the ailing industry, and comes only hours after the Senate killed the bailout proposal. It was the president’s own party which ended the life of the bailout proposal. The said proposal had the support of congressional Democrats in the White House but in their version of the bailout, they intend to use a different source of funds.
Is the bailout set to die in the United States Senate?
This can be hard for the industry and for the smaller players.
The Democrats in Congress are taking notice. They want to support the ailing US auto industry, and they want to provide more aid to the ailing sector which is bleeding in cash and jobs. The push was made by House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid thru a letter that was sent to Treasury Secretary Henry Paulson. On the letter, the two lawmakers pushed for the expansion of the $700 billion bailout to include car companies. In the letter they said;
A healthy automobile manufacturing sector is essential to the restoration of financial market stability, the overall health of our economy, and the livelihood of the automobile sector’s work force. The economic downturn and the crisis in our financial markets further imperiled our domestic automobile industry and its work force.
This should be a welcome development for the automotive industry if the move will push thru.