It’s a start anyway.
Battered Chrysler Group LLC said today that it will turn on assembly lines the week of June 29th at seven of its plants that were shut down when old Chrysler filed for bankruptcy. The resumption of production, if followed by a corresponding sales increase of the vehicles made, is vital for the cash flow of the revived company, and – just as importantly – its dealers and suppliers.
All of Chrysler’s plants were shut down at the beginning of May because of complications arising from the bankruptcy filing, the refusal of several key suppliers to continue shipping parts as the court sorted things out, and the need to keep a close watch on the inventory of vehicles that saw days supply rising. Chrysler sales plummeted 46% year-over-year through May, the months when the impending collapse or bankruptcy itself dominated the news media. No model from any Chrysler brand is currently listed in the Top Ten U.S., sales list.
General Motors Corporation also announced at the end of April downtime at its 13 assembly operations in North America. The closings range up to nine weeks in duration, depending on the plant. All but two of the U.S. and Canadian plants were already scheduled for the traditional summer shutdown during the weeks of June 29th and July 6th. It is an attempt by bankrupt GM to trim its inventories by taking 190,000 vehicles out of production in the second and third quarters.
Running through July 1 Chrysler is offering zero percent financing for 60 months through GMAC Financial Services on select 2009 model vehicles, or up to $4,000 in Consumer Cash on 2009 model vehicles. In addition, current Chrysler vehicle owners are eligible for $1,000 Owner Loyalty cash on most 2008 and 2009 Chrysler, Jeep and Dodge vehicles. These offers are in addition to the $1000 Credit Union Bonus Cash on select products for qualified credit union members who finance their new vehicle purchase through a participating Credit Union under the Invest in America program. These incentives are valid through July 1, 2009.
Since Chrysler only reports sales on a monthly basis, it is too early to say whether sales are picking up in a meaningful way. Overall, industry sales remain stuck below 10 million units on an annualized basis, the lowest level in more than four decades.