Cool Cherokee Sales Force Longer Plant Shutdown

Date 2000/7/19 0:00:00 | Topic: Cherokee

Cooler-than expected Jeep Cherokee sales over the past few months have caused an increase in inventory forcing DaimlerChrysler to extend an already extended plant shutdown for an additional two weeks. The Toledo Blade has the full story:

Starting Monday, about 2,800 of 5,000 Toledo Jeep Assembly employees will be idled for two weeks beyond an already extended summer shutdown.

"It's to balance our inventory," DaimlerChrysler spokesman Trevor Hale said yesterday of the planned six-week shutdown of Cherokee production.

DaimlerChrysler AG began July with nearly twice as many Cherokees in inventory as typically desired, and sales are sliding.

Sales of the Cherokee, which set a record in 1999, were dismal in June and have declined 17 per cent so far this year with 71,006 vehicles sold nationwide.

Laid-off workers get 95 per cent of their pay as part of the United Auto Workers contract with DaimlerChrysler.

As of July 1, DaimlerChrysler had a 113-day supply of Cherokees, compared with 71 days for the average light truck and 63 days for Toledo Jeep's other vehicle, the Wrangler, according to Automotive News, an industry publication. The industry's traditional supply target is 60 days.

U.S. sales of the Cherokee - which eventually will be replaced by a still-secret Toledo-made Jeep to be introduced next summer - plunged 33 per cent in June to 10,102 vehicles.

Competition from newer compact sport-utility vehicles and a recent switch from leasing to cash incentives that hurt sales in some areas have contributed to the Cherokee's decline, automaker and industry officials have said.

The article also goes on to say that Wrangler sales are also slightly lower (2%) over the past six months.

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