Stellantis is temporarily cutting production at its plants in Michigan and Ohio, a company spokesperson confirmed in emails to Automotive Dive.
The automaker will lay off 1,600 employees at its Warren Truck Assembly Plant during the month of July, as it adjusts vehicle output to meet market demand. The plant employs roughly 3,300 hourly workers.
Meanwhile, an undisclosed number of workers at Toledo South will be reassigned to Toledo North between July 8 and Aug. 15, Stellantis says, “to align production with sales, retool the plant for a new model and observe a week for summer vacation,” according to an email.
As part of its new labor contract with the United Auto Workers union, which represents workers at the plant, the impacted employees at the Warren Truck Assembly Plant will receive layoff pay and benefits throughout the shutdown. The plant currently builds the Jeep Wagoneer, Wagoneer L, Grand Wagoneer and Ram 1500 Classic Quad Cab and Crew Cab models.
“Stellantis is adjusting the operating pattern at its Warren Truck Assembly Plant to align production with sales,” company spokesperson Jodi Tinson wrote in an emailed statement to Automotive Dive. “The Company will continue to monitor demand and take the necessary action to balance inventories.”
During its investor day event last month, Stellantis reported that its North American market share was in “moderate decline.” As a result, the company is facing rising inventories with vehicle supply that is higher than the industry average of 76 days as consumer preferences for smaller vehicles impact sales of full-size SUVs and trucks.
In May, Cox Automotive reported that Stellantis’ Dodge brand had the highest days’ supply of unsold vehicles out of 29 major brands (151 days), which is more than double the industry average. The Jeep and Ram brands also have days’ supply that’s more than double the industry average, according to Cox Automotive data.
Stellantis’ Jeep and Ram brands also weighed on the average days of supply across the industry at the start of May, Cox Automotive reported, with Jeep inventories rising by 21% and Ram increasing by 14%.
However the UAW, which represents workers at the plant in Michigan, blamed the production cuts as a way for Stellantis to trim its expenses after the union won historic wages gains for its members last fall.
“Stellantis can afford to keep Warren Truck running at two shifts, they just want to find another penny to pinch at the expense of hardworking autoworkers,” UAW president Shawn Fain said in a statement. “Thanks to our contract, these workers will get layoff pay and benefits in the meantime while we fight to make sure Stellantis stops trying to kill US jobs.”
On Tuesday, Stellantis reported that its Q2 U.S. sales declined by 21% year-over-year. However, it reported that Jeep brand retail sales for the Wrangler, Grand Cherokee and Compass increased by 24%, 12% and 15% respectively, compared to the previous quarter.
