Chrysler Cuts Deliveries in Response to Lagging Sales

DETROIT -- Faced with vehicles languishing on its U.S. dealer lots, DaimlerChrysler said Tuesday that it would slash retail deliveries by nearly 24 percent in the third quarter.

The lineup of subsidiary Chrysler Group has been bogged down by gas guzzlers and a misplaced faith in summer incentives. The move would follow the lead of Ford and General Motors, which previously announced production cuts in response to slow sales of trucks and sport utility vehicles.

Chrysler is cutting retail shipments in the quarter that ends Sept. 30 by 90,000 vehicles, to 290,000 vehicles. It had originally planned to ship 380,000.

The company plans to knock another 45,000 units off its schedule in the fourth quarter. For the entire second half of the year, retail shipments will be cut by 16 percent, to 705,000 vehicles from the previous target of 840,000, Chrysler said.

The cuts mean some plants will see temporary shutdowns between now and the end of the year. Chrysler officials said mostly truck plants would be affected. The company, which releases production schedules on a weekly basis, currently has three plants in the United States and one in Mexico off-line, out of a total of 14 North American plants.

"Our goal here is to keep our dealers -- get them back -- into a more competitive inventory level, so we can be ready for the second-half new product introductions," Chrysler Group chief executive Tom LaSorda said.

The announcement came four days after Stuttgart, Germany-based DaimlerChrysler projected Chrysler's third-quarter loss would be $1.52 billion -- more than twice what it had anticipated.

Executives said there were no immediate plans to close plants permanently as Ford and GM have done recently, but they did not rule anything out.