U.S. automakers reported strong sales overall for June and the second quarter – with a handful of notable exceptions. In the case of Stellantis, a 21% decline has led the automaker to order temporary layoffs at two plants – with more cuts possible.
Alfa was the only Stellantis brand to post increased U.S. sales for the second quarter.
Things haven’t been going well for Stellantis lately. The Euro-American automaker has experienced a series of sales declines this year, including a 21% drop for the second quarter.
A number of senior executives have been ousted, as a result, including the former head of Jeep, Jim Morrison, as well as Jason Stoicevich who served as senior vice president of U.S. retail sales for just three months. Now, hourly workers are starting to feel the pinch, as well, Stellantis announcing temporary layoffs at two plants – with still more cuts possible.
A bad year
Industry sales have generally been good this year. Not for Stellantis, however. The automaker formed by the merger of Fiat Chrysler Automobiles and France’s PSA Group has suffered two consecutive quarterly declines. And its strongest brands haven’t been immune.
Jeep has suffered some of the sharpest declines – and will see cuts at several of its plants.
Jeep was down 19% during the April-June quarter, Ram sales tumbling 26%. Only the company’s Alfa Romeo brand was in the black, with a gain of 8%. The downturn wasn’t entirely unexpected. Having eliminated its Charger and Challenger models, Dodge doesn’t have much to sell right now, its latest numbers down 17%.
But Stellantis CEO Carlos Tavares is clearly not happy with the recent results and has been shaking up his U.S. management team. Tavares took some of the blame himself, acknowledging he had been “arrogant,” during a recent media briefing, ignoring signs of trouble for two long.
Workers take a hit
For now, at least, there’s no sign that Tavares’ job is at risk. But, along with executives like Morrison, hourly workers are feeling the impact of declining sales.
A total of 1,600 employees will be idled temporarily at the Warren Truck Assembly Plant, about half the suburban Detroit factory’s workforce. The elimination of a second shift impacts production of the Jeep Wagoneer and Grand Wagoneer models. Sales actually have risen in recent months, though not to the level the automaker had hoped for.
“Arrogance” caught Stellantis by surprise during the first quarter of the year, acknowledged CEO Carlos Tavares.
The automaker had high hopes for the two products when they were launched in 2021 – going so far as to position Wagoneer as a distinct sub-brand. That experiment failed and Morrison’s replacement, Antonio Filosa, has rolled Wagoneer models back into the broader Jeep umbrella. But, for the moment, he and his team are struggling to find ways to further boost demand for the brand’s flagship models.
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Aligning production with sales
“Stellantis is adjusting the operating pattern at its Warren Truck Assembly Plant to align production with sales,” Stellantis said in a statement. “The plant will run one shift for the month of July. The company will continue to monitor demand and take the necessary action to balance inventories.”
The same reasoning will lead to a closure of one of two plants in Toledo, Ohio which produced the Jeep Gladiator. It will be down from July 8 until the first shift on August 19. Stellantis said it also will use the break to retool the plant for a new model. The automaker is relaunching a midsize Jeep for the coming model year. Workers at the Toledo South plant will remain on the job, however, temporarily lending support for production at the Toledo North plant. It produces the Wrangler model.
Eric Graham, who heads United Auto Workers Local 140 – which represents the Stellantis plant in Warren – told the Detroit Free Press several hundred additional hourly workers and “temps” at a paint shop are also expected to be impacted at the facility. The union has gotten a 30-day notice required before jobs are cuts.
Ongoing job cuts
Stellantis has been trimming its U.S. workforce for months, though most of the recent cuts have been small and slipped under the radar. That includes 199 hourly employees at a Ram pickup plant in Sterling Heights, Michigan laid off in April, and 400 engineering, technology and software employees cut in March. Another 341 temps were cut in Toledo in March.
The automaker, meanwhile, is widely expected to continue trimming white-collar roles, notably in product development areas, as Headlight.News recently reported. In a number of cases, those jobs are being transferred over to Stellantis operations in Europe.
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