Chrysler, Ford idle factories, GM delays new plant

The Big Three try to keep their heads above water as they wait for government loans

AP

DETROIT. Chrysler is closing all its North American manufacturing plants for at least a month, the starkest move yet taken by U. S. automakers as they anxiously await word about government loans.

The shutdown comes as General Motors Corp. said a report that it and Chrysler have restarted talks to combine the two ailing automakers is untrue.

The Wall Street Journal, citing people familiar with the discussions, said Thursday that talks about a combination have been rekindled after Cerberus Capital Management LP, the majority owner of Chrysler LLC, signaled it is willing to part with some of its stake in the automaker.

GM spokesman Tony Cervone said Thursday the auto maker's stance on the merger talks has not changed since it suspended them when it announced 3Q earnings in November. GM and Chrysler had been in talks earlier this year to combine, but financing was a big obstacle.

Chrysler, GM and Ford Motor Co. have been taking dramatic steps as they struggle to survive the recession and U.S. sales have dipped to their slowest rate in 26 years. Attempting to cut costs, GM was halting construction of a plant tied to one of its most important projects, the Volt. Ford also said it will shut down 10 plants for an extra week in January because of sluggish sales.

Chrysler said Wednesday it would extend the normal two-week holiday shutdown that begins Friday to at least Jan. 19 at all 30 of its factories.

Meanwhile, the Bush administration is looking at "orderly" bankruptcy as a way to deal with the desperately ailing U.S. auto industry. House press secretary Dana Perino said, "There's an orderly way to do bankruptcies that provides for more of a soft landing. I think that's what we would be talking about."

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