Dive Brief:
- Stellantis is preparing to lay off up to 2,450 workers at its Warren Truck Assembly Plant in Michigan, the automaker confirmed in an email to Automotive Dive Friday.
- The plant employs 3,700 UAW-represented workers, meaning the layoffs could affect over 60% of the plant's hourly workers. However, Stellantis said the actual number of impacted employees will likely be lower.
- The layoffs are slated to begin as early as Oct. 8 when production of the plant’s Ram Classic 1500 pickup comes to an end later this year.
Dive Insight:
During its investor day event last month, Stellantis reported that its Q2 U.S. sales declined by 21% year over year and that its North American market share was in “moderate decline.” As a result, the company is facing a growing inventory of unsold vehicles and is looking for ways to reduce costs.
The Ram 1500 Classic is being replaced by the new Ram 1500 Tradesman, which is largely aimed at commercial customers. However, the Tradesman will be built at the automaker’s Sterling Heights Assembly Plant in Michigan, Reuters reported last week.
As a result, the Warren plant will move from a two-shift to a one-shift operating pattern in general assembly. However, the Warren plant will continue to build the Wagoneer L and Grand Wagoneer and will remain on two shifts to support production of these models.
“With the introduction of the new Ram 1500, production of the Ram 1500 Classic at the Warren Truck Assembly Plant will come to an end later this year,” the automaker said in an emailed statement to Automotive Dive.
Stellantis said that Worker Adjustment and Retraining Notifications are being provided to state and local governments as required by law, as well as to the UAW.
Senior employees represented by the United Auto Workers will receive 52 weeks of supplemental unemployment benefits paid by Stellantis, as well as 52 weeks of transition assistance, the company said. These benefits are in addition to any state unemployment benefits workers may be eligible to receive. Displaced workers will also receive two years of healthcare coverage.
The layoffs come after Stellantis said last month it was temporarily cutting production at the Warren plant and Toledo South plant in Ohio. The automaker confirmed it was temporarily laying off 1,600 employees at the Warren plant during the month of July in order to adjust vehicle output to meet market demand.
After the temporary layoffs and production cuts were announced at Warren in early July, the UAW claimed it was a way for Stellantis to further trim its expenses after the union won historic wages gains for its members last fall. The plant employees are represented by UAW Local 889.
In response to the Stellantis layoffs, UAW president Shawn Fain issued a statement critiquing the automaker’s leadership.
“Stellantis CEO Carlos Tavares is a disgrace and an embarrassment to a once-great American company. While GM and Ford report fantastic profits and increased sales, Stellantis is going backwards,” Fain said. “We have been clear in private and in public with Stellantis that Tavares’s mismanagement of this company and his lack of commitment to the American autoworker is unacceptable.”
In North America, Stellantis’ volumes were down by 20%, or nearly 100,000 units in Q1, as the automaker prepares its U.S. manufacturing operations to produce next-generation vehicles. But the company expects that new product launches will help to drive growth in the second half of 2024.
