The company will take a “two-week mandatory shutdown for the weeks of July 7 and July 14,” Nardelli said in the memo.
“As a private company, we need to think like owners and do our part to accelerate Chrysler’s recovery and transformation,” he said.
Workers will have to take vacation during the period unless they make special arrangements with the company. The move affects the majority of the company’s 15,061 salaried employees and 56,517 hourly workers around the world.
Some operations will need to keep working during the designated period “to support business-critical activities,” the memo said. Such “business-critical” activities would include sales and dealer support functions, a company spokeswoman said.
“Employees who have already used their vacation days, have insufficient earned vacation for the year or are otherwise committed to noncancelable vacation plans during other time periods should work with their local management to make alternative arrangements,” the memo said.
Chrysler has never had a companywide shutdown before, said Mary Beth Halprin, a Chrysler spokeswoman.
“This is the first year Chrysler is implementing a shutdown,” she said.
Some employees who had already taken their allotted vacations might have to take the two weeks without pay, she said.
Nardelli’s message told employees the company was taking the mandatory vacation plan “in order to create better alignment and efficiency across organizational lines and boost productivity.”
Chrysler, General Motors and Ford Motor Co. typically idle U.S. plants in early July for vacations and shut individual manufacturing operations at various times to retool when they have car and truck model changeovers.
Canadian Auto Workers president Buzz Hargrove said the shutdown wouldn’t affect Chrysler employees at two Canadian plants because there’s a normal summer shutdown anyway.
Hargrove called the shutdown a “good business decision.”
The U.S. auto market has slumped by a wider margin than most analysts had anticipated last summer, when Cerberus completed its acquisition of its majority stake in Chrysler. The company has indicated that it is trying to step up its restructuring efforts in response.
Nardelli has repeatedly said that the automaker would focus on bolstering its cash position, and Chrysler has taken a number of cost-cutting steps in recent weeks.
Chrysler announced last week that it was shutting a design studio outside San Diego it has maintained since the early 1980s.
The automaker has also taken a hard line in negotiations since late last year with bankrupt parts supplier Plastech Engineered Products in an effort to steer clear of a more expensive bailout for the privately held company.
Chrysler’s U.S. sales are down almost 13 percent in the first two months of the year.
Filed by Automotive News, a sister publication of Workforce Management. To comment, e-mail email@example.com.