Amid the worsening sales slump facing the automotive industry, Chrysler has announced plans to close an assembly plant and eliminate shifts from another in the St. Louis area. These plants are responsible for the manufacturing of minivans and pickup trucks, both of which have recently faced a decreased demand by customers.
Chrysler St. Louis South plant will be shut down entirely. The plans currently manufactures Chrysler’s minivans include the Chrysler Town & Country and the Dodge Grand Caravan. In addition, the St. Louis North plant, which makes full-size pickup trucks such as the Dodge Ram, will see cuts in shifts beginning in September.
The automaker cites having too much manufacturing capacity as a large problem. The fixed costs associated with such facilities needed to be eliminated in hopes of curbing rising costs amid dwindling sales.
Chrysler has recently been deflecting numerous rumors about its financial standing. Among the rumors are those that stemmed from Europe regarding possible bankruptcy. In addition, other rumors have suggested that the automaker’s owner, Cerberus Capital Management, plans to sell off the company in pieces.
Although Chrysler and its owner continually deny recent rumors, they are continuing to make bold decisions in an effort to turn things around. The slowing economy, rising gas prices, and changing consumer demands, which have been felt first hand among Birmingham Chrysler, has changed the automotive market. Now buyers require smaller and more fuel efficient vehicles, which have all contributed to the automaker’s needs to make sweeping cuts to both its lineup as well as its manufacturing facilities. As sales continue to fall, the need to alignment inventory with demand has become apparent.
Chrysler still realizes that consumers will still needs pickup trucks and vans, despite the cuts. Even with gas rising, trucks are still needed and are still in demand at Reading Chrysler Dodge Jeep, especially for business and commercial use. As such, Chrysler still reportedly has plans for the future Dodge Ram, and may even offer the full-size truck as a hybrid. Although new truck sales have faltered, Used Trucks Birmingham have seen steady interest thanks to ultra low sticker prices and incentives.
The Chrysler facilities located in Newark, Delaware, have already been close for several weeks. This assembly plant is responsible for the Dodge Durango and Chrysler Aspen SUVs. The truck plant in warren Michigan, which also makes the full-size Dodge Ram, will also close for several weeks during the summer.
As more factories are either shut down or idled, Chrysler executives are expected to go back to the drawing board to determine which models and initiatives will be necessary in helping turn things around. Several models have already been removed from the company’s lineup, for example the Jeep Commander, and new incentives have included the much-hyped Let’s Refuel America program, which helped move inventory at Lamesa TX Chrysler. However, these efforts have done little to stimulate sales.
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