Battered by plummeting sales, Chrysler said Wednesday it will halt production at 30 plants across North America, including one in Windsor, Ont., while Ford announced plans to extend the closure of 10 plants over the holidays.
The Chrysler closures are set to begin this Friday. Employees at most of the plants will not return to work until Jan. 19 at the earliest. However, the Windsor plant -- which makes minivans -- could be shut down until Feb. 2. A plant in Brampton, Ont., will also be temporarily closed.
At a meeting of finance ministers in Saskatoon on Wednesday, much of the talk centred on how the struggling auto sector has affected Ontario's economy -- and, by extension, the entire country.
"Ontario is 40 per cent of the Canadian economy," said Ontario Finance Minister Dwight Duncan. "All Canadians have a vested interest in Ontario's success."
Chrysler said its dealers have recently expressed concern that consumers are having trouble buying vehicles because of a lack of financing, as a result of the worldwide credit crisis.
"The dealers have stated that they have lost an estimated 20 to 25 percent of their volume because of this credit situation," the company said in a statement Wednesday.
The temporary closures will affect about 46,000 workers in the United States alone. Those employees will get state unemployment benefits and supplemental payments from the company, according to ABC News.
Meanwhile, Ford said Wednesday it plans to close 10 of its plants in North America for an extra week in January.
Those plants had already been scheduled to close for two weeks. But company spokesperson Angie Kozleski told The Associate Press it would be extended until Jan. 12.
All operating assembly plants are affected, except for ones in Claycomo, Mo., near Kansas City and the Dearborn, Mich., truck plant.
The temporary closures come as the Detroit automakers await a possible financing package from Ottawa and Washington that would be worth billions of dollars.
Chrysler CEO Robert Nardelli said that if U.S. lawmakers can't secure $14 billion in financing and restructuring loans, the effects would be catastrophic for the North American economy.
"I don't think we would be able to go into bankruptcy," Nardelli told CNN Wednesday. "It could force us right into liquidation."
Nardelli added that would put one million people out of work, including about 140,000 employees at the company's 3,300 dealerships.
Plus, if the company ceased to exist, that would leave 30 million drivers who own Chrysler vehicles high and dry when it comes to maintenance and service down the road.
"This would be a huge, huge impact on this economy."
The Canadian government has pledged about $3.5 billion in temporary loans to the Detroit automakers, but the funding is contingent upon a deal in the U.S.
