Chrysler closing down all its 30 plants in order to match declining sales

The automobile manufacturing giant company Chrysler is facing a tough time as the demand for its cars continues to decline. In a recent conference the company announced that it will be shutting down all of its 30 manufacturing plants for a duration of one month starting from the coming Friday.

The US has experienced the most serious decline in auto sales since the past two decades. Chrysler has decided to shut down its plant in an attempt to bring the production level down to match the slowing demand for its vehicles. This will help them to conserve the cash that was being spent on maintaining production at the same level.

The bulk of the potential buyers of the company’s cars are being kept away from the showrooms because of the tightening f the credit markets. The dealers are suffering because of lack of financing which has mad them unable to close ales for the buyers. The deteriorating credit situation has brought the volume of sales down by up to 25%. The company recorded a 47.1% decline in its sale in the month of November alone.

The company has appealed to Washington for financial aid without which they could run out of cash in the coming weeks. Chrysler estimates that its will be hit by a $2.5 billion drop in cash by the end of the year. This is the minimum that the company requires in order to meet its pay suppliers, payrolls and general costs of running the company. The company will be unable make ends meet without any financial aid from the government.

The halt in the company’s operations will be initiated from Friday Dec 19th and none of the plants are set to be reopened before the 19th of January 2009. Chrysler is desperately trying to draw out a $7 billion loan from the government in an attempt to survive the worst slump in automobile sales in the last 26 years.

The government realizes that an abrupt bankruptcy declared by the suffering automakers would have devastating effects on the economy. The president has therefore announced a bailout package would soon be offered to the suffering automakers so as to enable them to stabilize their operations.