Does a Two-Week Shutdown Bode Ill for Chrysler?
By Matthew Phenix EmailMarch 27, 2008 | 4:18:23 PMCategories: Business
Dg009_036cl__mid With Chrysler's recent announcement that it will close most of its worldwide facilities for two weeks beginning on July 7, doubts are again surfacing as to the long-term viability of America's beleaguered Number 4 automaker.

The company's own employees aren't too pleased with this mandatory unpaid "holiday," either, particularly considering the announcement of it was followed by a memorandum instructing employees to discard planned days off and reschedule vacations to coincide with the shutdown.

The shutdown itself isn't really a big deal. General Motors and Ford instituted two-week summertime closures ages go, usually coinciding with the Independence Day holiday, and they give the Motor City a sort of lazy, hazy, Europe-in-August feel.

But somehow, Chrysler's decision to turn off the lights and lock up for two weeks seems more grave than GM and Ford doing it, more desperate.

Despite buckets of ink for the new Dodge Challenger (pictured here), the company's product range is looking pretty dusty these days. There isn't a segment of the market where Chrysler can claim real dominance, with the exception of minivans — and even those, with the rise of crossover vehicles, are becoming less and less relevant.

Continued after the break.

Photo courtesy of Chrysler.

Trouble is, Chrysler is saddled with a range of redundant and aging products, not to mention a load of Hemi-powered gas-guzzlers, including big pickups, big SUVs, and big sedans. Its first-ever gasoline-electric hybrid vehicles, the Hemi-powered Dodge Durango Hybrid and Chrysler Aspen Hybrid, are set to arrive in the fall. We'll note here that new vice-chairman Jim Press (formerly of Toyota) recently remarked to reporters that he expects every one of Chrysler's vehicles eventually will be hybrid-powered. Eventually.

Not long after settling in, new owner Cerberus Capital Management and new CEO (ousted former Home Depot chief) Bob Nardelli announced a host of cost-saving measures, including the elimination of a quartet of models (Chrylser's PT Cruiser Convertible, Pacifica, and Crossfire, and Dodge's Magnum).

As many as 10,000 hourly jobs and 1,000 salaried positions went on the chopping block, as did those of more than 1,000 contract workers.

And then there's the matter of dealers. There are too many of them — something close to 3,600, or about twice as many as there should be.

Naturally, the kind of bloodletting that followed the Cerberus takeover always inspires a load of increasingly grim rumors among enthusiasts, suppliers, business reporters, and members of the automotive press.

For instance, word began to fly that the beloved Viper sports car was headed for that great snakepit in the sky, and that Jeep was about to be sold to a Chinese automaker. Another elaborate scenario has Chrysler and Ford merging, with Ford salvaging only the Jeep brand and Chrysler's minivans. (We'll note here that so far, Chrysler management is denying nothing.)

So there's no denying that times are tough in Detroit, and for Chrysler in particular. Something's gotta give. Things are changing in Auburn Hills, but the question is, will the company simply deconstruct and evaporate, or can Cerberus and Nardelli and Press pull off an Iacocca-style turnaround before the game is lost?

We'll note here that new vice-chairman Jim Press (formerly of Toyota) recently remarked to reporters that he expects every one of Chrysler's vehicles eventually will be hybrid-powered. Eventually.