Chrysler Shutdown Shows Need for Immediate Help for Automakers

by James Parks, Dec 18, 2008

After Chrysler announced it is shutting down all of its North American plants starting tomorrow, elected officials, union leaders and other industry supporters urged the Bush administration to immediately provide assistance to the auto industry or risk an economic tsunami in the nation’s manufacturing sector. 

Citing a 47 percent drop in sales last month, Chrysler said late yesterday it will shut down all 30 of its North American plants at least until Jan. 19, putting 46,000 employees out of work. The plants are typically shut down from Christmas Eve through New Year’s Day. The workers will receive holiday pay from Dec. 22 through Jan. 2. After that, the workers will be considered laid off for the additional weeks their plants are shuttered. Some of the plants could be shut down into February, according to published reports.

Chrysler is not the only auto company to take drastic measures while the Bush White House decides how to help the industry. The Detroit Free Press reports that General Motors is temporarily halting work on a new engine plant that is slated to build four-cylinder engines for the Chevrolet Volt electric vehicle and Chevrolet Cruze compact car. And Toyota, a company that conservative Republicans have touted as the model for the Big Three automakers, announced Monday it was halting work on a Mississippi factory that would have built a new version of the Toyota Prius hybrid.

Sen. Debbie Stabenow (D-Mich.) says the situation in the auto industry is dire and must be addressed quickly or the entire economy could be jeopardized. She told the Free Press:

Manufacturing makes up the backbone of this economy, and that backbone is being broken. This administration must act now to preserve the middle class and protect our economy.

When Senate Republicans blocked the $14 billion emergency bridge loan needed to keep the auto industry operating, they knew it could cost between 3 million and 5 million jobs. Experts predict that if even one of the Big Three automakers goes under, some 3.3 million jobs will be lost and the entire supply chain for all carmakers, including foreign-owned plants in the United States, will be seriously disrupted.

The White House may press union workers to accept the terms of a pay cut amendment introduced by Sen. Bob Corker (R-Tenn.), which would have required the UAW to accept deep concessions that would have effectively neutered the union.

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