THE worsening United States car sales slump hit Chrysler LLC as it announced plans to close one St Louis factory and cut a shift from another because of falling demand for minivans and pickups.
Officials with the Michigan-based auto maker said it will shut the St Louis South plant, which makes minivans, on October 31. The St Louis North plant, which makes full-size pickups, will be cut from two shifts to one.
The minivan plant's closure will cut 1,500 jobs, and it wasn't clear if the company would ever recall the 900 workers who will be laid off at the pickup truck plant.
Chrysler President and Vice Chairman Tom LaSorda said the company has no plans to reopen the minivan plant. He said there's only enough demand for three shifts, which the company already has running at its factory in Ontario.
"We have too much capacity," he said, adding that the company had to reduce its factory capacity to remove fixed costs. "Those are the tough decisions we have to make, but that's the decision we did make."
LaSorda also denied rumors that Chrysler's owner, Cerberus Capital Management LP, planned to sell the company in pieces. "Hogwash, absolutely not being considered at all."