Chrysler to shut down for fortnight as sales plunge

The American carmaker Chrysler has told its 70,000 workers to take a two-week holiday in July, in a company-wide shutdown reflecting plunging sales of vans and lorries.

Chrysler, which is owned by the private equity firm Cerberus Capital, is smaller than rivals Ford and General Motors, and is being squeezed by soaring petrol prices.

In an internal memo, Robert Nardelli , chief executive, asked staff to approach the idea "with an open mind and a team spirit". He wrote: "In order to create better alignment and efficiency across organisational lines and boost productivity, Chrysler will use a corporate-wide vacation shutdown for the weeks of July 7 and July 14."

Employees will be expected to use their holiday allowance for the period unless they have "non-cancellable vacation plans" at another time.

Chrysler suffered a 14% drop in sales to 150,093 vehicles during February. Although car sales were up, the number of lorries sold fell by 22%.

The motor sector is among the weakest in the teetering US economy. Retail sales figures from the commerce department yesterday showed a 1.9% drop in car expenditure, against a 0.6% drop in consumer spending as a whole.

Elsewhere in the sector, Ian Robertson, the chairman and chief executive of Rolls-Royce Motor Cars, has been appointed sales and marketing director at the parent company BMW, based in Munich.

Robertson, who will join the main BMW board, replaces Stefan Krause, who is leaving the German carmaker after 20 years to join Deutsche Bank as chief financial officer. Robertson will take up his new role immediately but will remain head of Rolls-Royce until a successor has been appointed.

News of Robertson's appointment came as BMW reported record sales volumes. Overall, BMW sold 1.5m cars, up more than 9%. Headline profits fell 6% to €3.9bn (£3bn).

Separately, Volkswagen said it was aiming to sell 87m cars a year by the end of the decade. It sold 6.2m vehicles in 2007. which put it in fourth place globally.