Chrysler Halt to Hit Supply Chain

Chrysler Corp. has announced plans to idle all 30 of its U.S. production facilities for one month, which will hit hard at recyclers who handle the company’s generated scrap as well as components makers who use scrap as feedstock.

Chrysler’s plants will furlough 46,000 workers beginning Friday, according to a company spokesperson quoted in the Washington Post. The shutdown is scheduled from Dec. 19, 2008, to Jan. 19, 2009, according to the news report.

Some factories, including two in Toledo, one in Detroit and one in Canada, will reportedly stay closed until later in January or until early February.

On the plastics side, former Chrysler supplier Plastech Engineered Products filed for bankruptcy early in 2008 and has subsequently sold many of its assets to Johnson Controls Inc.

That Milwaukee-based company has recently revised its earnings forecasts for early 2009 based on lower projections for the assembly and sale of automotive vehicles in North America.

Plastic components supplier Blue Water Automotive also filed for Chapter 11 protection early in 2008 and has since liquidated most of its assets.

Flex-N-Gate of Urbana, Ill., is another plastic components maker that supplies Chrysler. That firm has recently laid off 175 workers at a plant in Salem, Ohio. The company supplies bumpers and other exterior components as well as interior panels and brake pedals.