Chrysler Will Halt Pickup Production At Three Plants Temporarily

Is this a preview of what 2008 will look like for the automakers?

By Brendan Moore

12.06.2007

Employees at Chrysler LLC have told The Wall Street Journal that production at its two pickup truck plants in the U.S. will be stopped for the whole month of January, and for two weeks at its Mexican pickup plant.

A combination of low demand and extremely high inventories of unsold pickup trucks has forced the company to lower production. The Dodge Ram pickup is currently at 120 days supply. Manufacturers like to have 60 days or less of any models. Ram sales were down 17% last month and the overall pickup market has really tumbled as gasoline prices have gone up and the home-building industry has slacked off due to the mortgage industry meltdown.

In contrast to recent history when Chrysler would continue to churn out vehicles in order to keep the plants running, and then sell the excess inventory through heavy discounting and incentives, Chrysler has decided to curtail production.

The two idled U.S. plants are in Fenton, Missouri and Warren, Michigan.

GM is also planning to take down three of their pickup plants in January, but for two weeks only.

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Author: Brendan Moore

Brendan Moore is a Principal Consultant with Cedar Point Consulting , a management consulting practice based in the Washington, DC area. He also manages Autosavant Consulting, a separate practice within Cedar Point Consulting. where he advises businesses connected to the auto industry. Cedar Point Consulting can be found at http://www.cedarpointconsulting.com.

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1 Comment

  1. That time is over. I don’t think people will be buying pickups in the future unless they actually need a pickup truck.

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