Chrysler Closing Minivan Plant

Southfield (WWJ/AP)  -- Tough sales and rising gasoline prices leading to more cutbacks in the auto industry, this time at Chrysler.

Chrysler LLC said Monday it will indefinitely close its St. Louis South plant and cut production at another due to slumping demand for trucks and other large vehicles.

Officials with the Auburn Hills-based automaker said in a conference call that it will shutter the factory that makes  minivans, effective Oct. 31. The St. Louis North plant, which makes full-size pickup trucks, will reduce operations from two shifts to one.

Chrysler President and Vice Chairman Tom LaSorda said the company has no plans to reopen the minivan plant. He added demand for minivans can be handled by three shifts, so the company has no need to operate two factories. The other plant is in Windsor, Ont.

"We see no need for the capacity in the future,'' he said.

LaSorda also denied rumors that Chrysler's new owners, Cerberus Capital Management LP, had plans to sell the company in pieces.

"Hogwash, absolutely not being considered at all,'' he said.  "Absolutely no relevance. I don't even want to entertain those questions.''

A slowing economy and gasoline prices above $4 per gallon have cut U.S. car sales. Those who are buying are picking more fuel-efficient models.

LaSorda said the private company is meeting or exceeding its financial targets but "this environment is forcing us to make some very difficult decisions.''

Chrysler said the moves would result in the reduction of 2,400 jobs. That includes 1,500 at the minivan plant and another 900 at the pickup truck plant.

Monday's announcement follows a memo sent to workers Wednesday, in which the company said the Toledo North Assembly Plant will be shut down for seven weeks from July 7 through the week of Aug. 18 due to sagging sales. The plant makes the Jeep Liberty and Dodge Nitro midsize sport utility vehicles.

The Detroit News reported Monday the Jefferson North plant in Detroit will idle for a month beginning July 11, according to two sources familiar with the production plans.  Workers at Jefferson North make the Jeep Grand Cherokee and Jeep Commander.

Most auto factories are idled for only one or two weeks during the summer as the company shifts from one model year to the next.

Chrysler's U.S. sales were down 25 percent in May, a month in which the whole market dropped 11 percent when compared with May of last year. Through the first five months of the year, its sales were off 19 percent, with huge drops in larger vehicles that make up most of Chrysler's lineup.

For instance, Durango sales are down 44 percent through May when compared with the same period last year. Ram sales are down 27 percent, while Nitro sales are off 32 percent and Liberty sales are down nearly 14 percent.

General Motors and Ford already have announced cuts due to the latest market downturn. Chrysler announced cuts in November, but analysts have said the company needs to do more.