Chrysler Group LLC, the U.S. automaker created out of bankruptcy last week, said it will resume production at seven vehicle plants the week of June 29.
The facilities are in Michigan, Ohio, Missouri, Ontario and Mexico, the company said today in a statement. Chrysler reopened a Detroit car factory on June 15. Other assembly plants may not open until late July after they are reconfigured to build 2010 models, spokeswoman Dianna Gutierrez said in an interview.
The automaker idled its plants after filing for bankruptcy April 30, as it sought to reduce inventory to adjust to demand. The risk for Auburn Hills, Michigan-based Chrysler in keeping them closed is that carmakers post revenue when vehicles are shipped to dealers, not when consumers buy them, and waiting too long stems cash flow.
"They've got to start generating revenue, and the way they do that is by producing and shipping vehicles," Rebecca Lindland, a senior forecaster at IHS Global Insight Inc. in Lexington, Massachusetts, said. "Their revenue stream is terrible."
The plants being reopened will be idled again next month for the company's annual two-week shutdown that begins July 13, Gutierrez said.
Factories Being Reopened
The resumptions announced today are Sterling Heights, Michigan, which makes Chrysler Sebring and Dodge Avenger sedans; Warren, Michigan and Fenton, Missouri, which build Dodge Ram and Dakota pickups; Toledo, Ohio, which assembles Jeep Wrangler sport-utility vehicles; Brampton, Ontario, which produces Dodge Charger and Challenger and Chrysler 300 cars; Windsor, Ontario, which provides Chrysler Town & Country and Dodge Grand Caravan minivans; and Toluca, Mexico, which makes Dodge Journey and Chrysler PT Cruiser SUVs.
Other Chrysler facilities that supply the assembly plants also will be running, according to the company's statement.
The Detroit factory that opened earlier this week builds Dodge Viper sports cars.
Those that haven't been slated to resume output yet include the Belvidere, Illinois, factory that produces Dodge Caliber cars and Jeep Patriot and Compass SUVs; a Toledo facility the builds Dodge Nitro and Jeep Liberty SUVs; the Detroit plant that makes Jeep Grand Cherokee and Commander SUVs; and the Saltillo, Mexico, factory that assembles heavy-duty Dodge Ram pickups.
New Start
A return to full production would mark a new beginning for the automaker under management of Fiat SpA. Chrysler spent 42 days in bankruptcy before a new company was formed June 10 from what the company considered its best assets, with Turin, Italy- based Fiat holding a 20 percent stake.
With virtually no production over a two-month period, Chrysler will be able to drive down its inventory of vehicles waiting to be sold. At the end of May, the company had 260,407 unsold cars and trucks on dealer lots, a drop from 412,009 a year earlier. Dealers were running short of some models, such as Jeep Wranglers, at month's end.
Based on the current sales level and limited production, Chrysler's inventory may be well under 200,000 at the end of July, said Haig Stoddard, an automotive analyst at IHS Global Insight's Troy, Michigan, office.
Chrysler's shutdown, combined with the temporary closing of many General Motors Corp. plants, is putting a strain on auto- parts makers. Many suppliers lack the working capital to easily restart production, Neil de Koker, president of the Original Equipment Suppliers Association, said yesterday in an interview.
