Chrysler Announces Plant Idling, Shift Elimination
By Chris Haak
Chrysler LLC announced yesterday that it is indefinitely idling its St. Louis South Assembly Plant and eliminating the second shift at its St. Louis North Assembly Plant. The St. Louis South plant builds the Chrysler Town & Country and Dodge Grand Caravan minivans, and the St. Louis North plant builds the Dodge Ram full-size pickup. The van plant had been operating on one shift, and the pickup plant had been operating on two shifts. Both vehicles are still built elsewhere.
Ford and GM have already announced a series of moves in response to the colossal shift in the US auto market that began just two or three months ago, including adding shifts to small car production facilities and closing plants or eliminating shifts at truck and SUV production facilities, but we hadn’t heard any concrete steps from Chrysler until today.
It was clear that Chrysler had to do something to rein in its truck production capacity and keep it closer to where demand is likely to be for the rest of the year. The company has gone on record over the past few months saying that it expects to gain market share in the hyper-competitive (and rapidly shrinking, by the way) full-size pickup market because of the myriad improvements added to the Ram pickup, including a true crew cab for the first time.
Unfortunately, the shift elimination and plant closing will hit the same city – St. Louis – simultaneously. They will mean a loss of approximately 2,400 jobs (1,500 at St. Louis South and 900 at St. Louis North).
In what may be a disturbing parallel, Chrysler also had high hopes for their new-for-2008 minivans in a declining market, but the vans have suffered in the current market, along with the company’s pickups. (The pickups, of course, are due to be replaced this fall by the new 2009 Ram). Chrysler’s overall sales are down 19.3% year to date.
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