DETROIT (AP):

Chrysler LLC announced yesterday that it was closing all 30 of its manufacturing plants for a month, starting tomorrow, as it seeks to counter the most severe downturn in United States (US) auto sales in more than two decades.

By extending the traditional two-week holiday shutdown period, the struggling Auburn Hills, Michigan-based automaker can adjust production to slowing demand and conserve cash.

In a statement yesterday, Chrysler said tighter credit markets were keeping would-be buyers away from its showrooms. The company said its dealers were unable to close sales for buyers due to a lack of financing, and estimate that 20 to 25 per cent of their volume has been lost due to the credit situation. Sales in November slid 47.1 per cent.

Running out of cash

Chrysler and larger rival General Motors Corporation have warned they could run out of cash within weeks without financial aid from Washington. Chrysler has said its cash will drop to US$2.5 billion by December 31, the minimum needed to meet payroll, pay suppliers and run the company. It would have trouble paying bills after the first of the year.

Operations will be idled at the end of the shift tomorrow and the earliest plants will reopen is January 19 in the New Year. A few plants will reopen on January 26.

Chrysler is seeking US$7 billion in government loans as it tries to survive the recession and the worst US auto sales slump in 26 years.

Local angle

Last night, Ian Lyn, brand manager for Dodge/Chrysler/Jeep at Motor Sales and Services Ltd, said it was unfortunate that Chrysler and other United States brands were going through their current economic difficulties.

"We are hoping this does not spell the end of the Dodge brand," Lyn said. He noted that Motor Sales would not immediately speculate on what the long-term impact would be on future sales.

Motor Sales has been the local Chrysler/Dodge/Jeep dealer since 1942.