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Following GM and Ford’s recent production cutbacks, Chrysler has stepped up and added several weeks of facility downtime and announced plant actions at their St. Louis operations. As part of the plan, Chrysler will idle the St. Louis South plant that produces minivans at the end of October and will eliminate a shift at St. Louis North, coinciding with the launch of the redesigned Dodge Ram pickup in September.
Although it is not publically acknowledged by Chrysler, the company is also planning extensive downtime relating to truck production amid considerable market weakness which is impacting the truck segments more severely. The plants affected by this downtime include Jefferson North, Newark, Toledo North, Warren Truck and Windsor. The downtime will primarily affect Jeep production at Jefferson North and Toledo North and will result in volume reductions of 10,000 units and 3,000 units, respectively, for the year.
Regarding CSM Worldwide’s latest North American light vehicle forecast, minimal variance exists with the closure of St. Louis South advancing 18 months from what we originally forecast. This earlier closure results in no lost volume with all volume shifting to the Windsor facility. CSM has been forecasting a shift reduction at St. Louis North for Ram production that advances nine months from the current forecast. Net volume reductions are expected to be minimal, less than 5,000 units for 2008 with production being emphasized at the Warren Truck facility.
Despite an investment of over $1 billion to retool the St. Louis plants, the quick decision to close the South plant and projected lack of demand to support Ram output at the North plant is expected to result in an earlier closure date, possibly as soon as mid-2009. All light-duty Ram production would then transfer to Warren Truck to increase utilization. Due to substantial market weakness and escalating concern for Chrysler as a viable entity, production volumes for numerous programs will be reduced sharply in 2009 and beyond.
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For questions, please contact Joe Langley,
Senior Analyst, North American Vehicle Forecasts,
at joelangley@csmauto.com or +1 248 465 2832.
CSM Worldwide provides trusted automotive market forecasting services and strategic advisory solutions to the world’s top automotive manufacturers, suppliers and financial organizations. CSM Worldwide covers the global automotive environment from Detroit, Grand Rapids, Frankfurt, London, Paris, Shanghai, Tokyo, São Paulo, Budapest, Delhi, Bangkok and Seoul.