Chrysler Cutting Production To ‘07

Chrysler Group is curbing production at the company’s truck and minivan plants in theU.S. and Canada for the balance of the year and into January, DaimlerChrysler officials confirmed Thursday.

Chrysler officials declined to quantify the scope of the cuts but they will lead to production halts and curbs on overtime at a truck and a minivan plant near St. Louis, Mo., as well as the minivan plant in Windsor, Ont. Plants building trucks and sport-utility vehicles -- Detroit, Warren, Mich., and Newark, Del. -- also will be affected by the cutbacks.


General Motors and Ford Motor Co. had slowed down production of trucks and SUVs earlier this year but Chrysler executives had been loathe to make similar cuts until the growing inventories of unassigned vehicles led to a $1.5-billion operating loss in the third quarter. Another loss is now expected in the fourth quarter.


Tom LaSorda, Chrysler Group chief executive officer, said, “When you look at dealer inventory levels, which we reported monthly and always have, we’ve reduced that level from the mid-year by over 100,000 units, with the goal of being in the low 500,000 range by year-end, and I said that before and that’s kind of where we’re going to be,” he said.

“We’ve got to get the business back to managing production and balancing that with what’s going on at the retail level in the marketplace,” LaSorda said.

Chrysler dealers have been refusing to take delivery of some vehicles pushed by the Chrysler Group in its quest for more sales. The dispute with dealers over inventories became so rancorous that the Chrysler Group’s top marketing executive, Joe Eberhardt, resigned last week to operate a Mercedes-Benz dealership in the United States.

“Clearly we needed to address this issue,” said LaSorda. “There was an imbalance between production and the sales rate out in the retail field, and what current inventory that the dealers carried. Obviously, this is a process that we need to review,” LaSorda said.


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