As President Bush fumbles his way towards a possible bailout package for the American car companies, Chrysler has joined General Motors in trying to take some control of its destiny.

Chrysler revealed this morning in the US that it is planning to shut its entire manufacturing system for at least a month from the end of shift tomorrow night. Some factories will close until early February.

The company told US media outlets that all 30 of its plants will close for at least a month at the end of shifts on December 19.

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ENDS MIDNIGHT

But two of those 30 will shut for longer: two factories in Ohio, that make the Jeep Liberty, Dodge Nitro and Jeep Wrangler will close until Monday, January 26 while the minivan plant in Windsor, Ontario and the Dodge Viper operations in Detroit will shut until February 2. Chrysler said in the statement this morning that earliest the plants will come back on-line by first shift on Monday, January 19.

On Friday last week, GM revealed plans to cut March quarter production by a huge 250,000 vehicles — compared to the March quarter of 2008, that’s a 60% cut in output.

Chrysler’s decision to suspend production comes after a 47% drop in its US sales in November.

Meanwhile, GM suspended work indefinitely on its $US370 million factory in Michigan, that will make 4-cylinder engines for the Volt and the Chevrolet Cruze small car in 2010.

The company says the plant is still scheduled to produce the engines in 2010, when the Volt is supposed to debut.

The company’s move to delay the plant is a cost saving, but it’s also one with a message to the Government and Congress that GM will not spend while its fate hangs in the balance. if it goes bankrupt, the car will be someone else’s responsibility.

GM is clearly now conserving its cash to last into January. It needs to keep a minimum of $US11 to $US14 billion as working capital merely to keep the business ticking over and not growing. In the current market slump, that will not be enough to keep it alive for much longer with the aid.

GM and Chrysler have asked for a combined $US14 billion in federal aid in order to survive until March 31 next year.

But it’s not just the big two US companies (Ford will have to follow with its own cuts very soon now that GM and Chrysler have detailed theirs): Japan’s number two carmaker, Honda, has revealed a 64% cut in forecast earnings and there are suggestions its bigger rival, Toyota will confirm speculation of a huge second half loss above $US1 billion in the next few days.

Honda blamed plunging US and Japanese sales, plus the higher yen which hit a 13-year high against the US dollar overnight and will put further pressure on the export positions of the likes of Honda and Toyota. Honda last Friday cut its 2009 North American production forecast by 119,000 vehicles, the second cut in four months. Honda’s 2009 financial year sales forecast has been cut by 10% and the estimated operating profit of around $US2 billion will be just 20% of the 2008 figure. No wonder it quit Formula 1 racing.

Production cuts in North America, Europe and Japan will total 246,000 units in the year to next March. Honda says it will also suspend production for two months in England.

And in Europe, car car sales plunged 25.8% last month from a year before, according to the European Automobile Manufacturers’ Association.

That’s the biggest fall since 1999, and before that, 1993.

Australia’s drop in October was 22%, America’s fall last month was 34%.