DCX plans downtime to trim stockpiles

Idled factories will allow company to reduce inventory and prepare launch of several new models.

By Brett Clanton / The Detroit News

DaimlerChrysler AG's Chrysler Group plans to temporarily idle several assembly plants early next year, following General Motors Corp. and Ford Motor Co., who last week announced first quarter production cuts to reduce inventories.

While Chrysler's U.S. sales are up 3.2 percent this year in a flat overall market, the automaker ended November with a surplus of 68,000 vehicles.

The shutdowns should not derail DaimlerChrysler AG's Chrysler Group from building on sales success in 2004, a year in which the automaker has increased market share and profits despite sluggish economic conditions, Tom LaSorda, Chrysler's chief operating officer, said in an interview Friday.

"The biggest challenge (in 2005) will be maintaining the momentum," he said.

In addition to lowering inventories, the temporary closings will allow some factories to prepare for new model launches, LaSorda said.

Among the plants shutting down for a week or more at the end of the year or in early 2005 will be a Dodge truck plant in Warren, which is retooling to launch a new mid-sized Mitsubishi truck. The company's St. Louis South minivan plant will also close for retooling, as will a Detroit plant that builds the Dodge Viper sports car.

Chrysler's Dodge Durango SUV plant in Newark, Del., a PT Cruiser plant in Toluca, Mexico, will probably also close for a short time early next year to offset rising inventories, LaSorda said. The company is evaluating the temporary shutdown of other plants as well, LaSorda said.

At the end of November, Chrysler had an 89-day supply of new vehicles -- about 13 percent or 68,000 vehicles above average, Merrill Lynch analyst John Casesa said in a report. High inventories and weak November sales prompted GM and Ford last week to announce first quarter production cuts and are a "troubling" sign for the Big Three, Casesa said.

Chrysler is preparing a major renovation of its Belvidere, Ill., assembly plant where the Dodge Neon is built. The automaker is upgrading the factory's body shop and replacing tooling to make it flexible produce multiple models, LaSorda said.

The company spent about $400 million for a similar renovation at its Brampton, Ontario, large car factory to launch the Chrysler 300 and Dodge Magnum this year.

Chrysler will build a vehicle to replace the Neon in Belvidere, which is expected to be a small, wagon-like SUV that will be introduced in 2006. LaSorda said the renovation may enable the Belvidere plant to build vehicles set to replace the Dodge Stratus and Chrysler Sebring, which are now built in Sterling Heights.

"We're going to process this (project) as if we can do both," he said. "Whether we ever need it is a secondary question." Chrysler is developing the Neon, Stratus and Sebring replacements jointly with Mitsubishi.

After posting financial losses in recent years because of an aging product lineup, Chrysler launched a record nine new vehicles this year. But some analysts warn Chrysler's momentum could slow in 2005 with fewer new cars and trucks coming on the market. And while some automakers expect U.S. industry sales to rise 3 percent or more in 2005, Chrysler expects industry sales to remain flat at almost 16.8 million units or grow slightly.

"There may be fewer than nine vehicles next year," LaSorda said. "But we have some pretty delightful surprises coming as well."

The Dodge Charger, a replacement for the Intrepid, and Jeep Commander, a large, upscale SUV, will be introduced next year and should bolster sales, he said. The company will also receive the full-year impact of the Chrysler 300 sedan, Dodge Magnum wagon and other vehicles introduced in 2004.

Such products have helped Chrysler boost U.S. market share to 13.1 percent, up from 12.8 percent a year ago at this time, according to Autodata Corp.

"I see them continuing on this path next year," said Jim Sanfilippo, an automotive analyst with AMCI Inc. in Bloomfield Hills. "Chrysler is tough when they get a few bucks in their pocket."

Detroit News

redriderbob

 

Yep I know we will be down the first week of jan, perhaps two! Who hoo I hope for three! Ours is for the mitsu truck though.

Joe

 

is it still paid?

 

Tooling up for the 2006 Mitsu Raider pickup huh? Well for you guys who don't know about the Raider, check out the link below...

2006 Raider News and Information:

redriderbob

 

Hrm. Warren must be the Dakota factory then? I'm not sure whether to be discouraged since it'll take a little longer to get my truck built, or relieved that the payments won't start till that much later.

 

Hey PT how long did they say it would take to get it from when you ordered? Im going to be ordering a HO when they are available...

 

6-8 weeks was what the salesman told me 2 weeks ago. I think he was figuring in at least one week for Christmas, so I probably should have my truck by the time January ends anyway.

 

Thanks that doesnt sound too bad ill probably have to add 2 weeks to get it to Canada though

 

I have a good idea, they should stop making SUV's and Trucks with Fugly front bumpers. The Raider's front bumper is ugly but its better then those shelves that Dodge is using on their Dakota and Durago. Soon to be the Ram.

Maybe a little off topic for this but that was the first time I saw the Raider. I had to Rant!

- Jeffy James

 

they need to scrap the idea of the slanted grill too, all the companies are trying that and not succeeding, but they all keep doing it any way, its like they are trying to talk us in to liking it, it just annoys the hell out of me!!