Stellantis plans to lay off hundreds of full-time and seasonal employees starting Oct. 1 as it enters “full execution mode” aimed at coping with slumping sales and earnings. But the cuts could lead to further friction even as members of the United Auto Workers union vote on whether to authorize a strike at the Euro-American automaker.
Stellantis plans to layoff nearly 200 workers at the plant that produces the Ram 1500 assembly plant in Sterling Heights, Michigan.
Stellantis will cut nearly 200 jobs at a factory in the Detroit suburb of Sterling Heights, the Euro-American automaker said, a move that follows on the more than 2,400 job cuts it announced in August.
The action comes at a time when Stellantis is struggling to reverse a sharp slump in sales — U.S. demand falling 21% during the second quarter — and earnings. Net revenue was off about 48% during the first half of 2024, largely due to weak sales in North America.
The latest cuts appear to be increasing friction between Stellantis and the UAW which is in the midst of a strike authorization vote triggered by what the UAW claims are a string of broken promises made in last year’s national labor contract.
Who’s impacted
UAW President Shawn Fain, shown speaking with the media after calling for workers at the Sterling Heights Assembly Plant last year, says the company is not living up to its promises.
A total of 191 workers will be laid off at the Sterling Heights Assembly Plant. Of those, 177 are supplemental, or “temp” employees who fill in for other workers out sick or on vacation. Another 14 are full-time hourly employees represented by the UAW.
Additional cuts in seasonal staff were to be made at the Toledo Assembly Complex in Ohio. The exact number of cuts there hasn’t been revealed.
Still more cuts are being planned, Stellantis said in a statement, “across its footprint,” and will impact both temp and full-time employees.
The automaker had already announced in August plans to trim as many as 2,450 workers at the Warren Truck Assembly Plant in October.
Why the cuts
While U.S. auto sales have rebounded sharply this year — some brands, like Hyundai, setting sales records — Stellantis has seen a sharp decline in demand, notably at two of its traditionally strongest North American brands, Jeep and Ram.
Warren Truck Assembly Plant Manager Andy Ragalyi (left) and Stellantis CEO Carlos Tavares during a tour of the Warren Truck Plant.
The Sterling Heights plant produces the Ram 1500 pickup which went through a complete redesign for the current model year. The Warren plant assembled the Ram 1500 Classic, a version of the prior-generation pickup. Toledo, meanwhile, produces Jeep products including the Wrangler SUV and Gladiator pickup. All of those models have suffered from weak demand this year.
“Stellantis is in full execution mode focused on both protecting the company from the continued intense external market conditions and, at the same time, offering customers vehicles they can afford,” the automaker said in a statement addressing the latest job cuts.
“As such, we are continuing to take the necessary actions to improve operations across our facilities; this includes ongoing assessments of our manufacturing processes to improve efficiency. While that effort continues, the company will be implementing indefinite layoffs of represented employees across its footprint,” the company said in a statement.
More Stellantis News
- UAW Chief Threatens Strike at Stellantis
- Stellantis, UAW Square Off Over Commitments Made During Strike
- Stellantis Defensive After Dealers Urgently Voice Their Concerns As Sales Tank
Union friction
Fain is calling for a strike vote against Stellantis as the automaker readies to enact layoffs.
The announcement of the latest cuts comes at an awkward time. While announcing a call for a strike authorization vote a week ago, UAW President Shawn Fain accused the Euro-American automaker of reneging on a number of promises made as part of the nationwide contract the two sides signed last year. Among other things, it called for Stellantis to reopen a currently shuttered plant in Belvidere, Illinois, while also introducing a new midsize pickup truck.
For its part, Stellantis fired back, claiming Fain has made several false statements. It also demanded that the union stop trying to negotiate in public.
“We would all be better served if these issues were addressed across the table with productive, respectful, and forward-looking dialogue,” it said in a statement.
Top management at risk
Stellantis CEO Carlos Tavares may be on the way out right now.
Temp and hourly workers aren’t the only ones feeling heat, however.
A number of senior managers, including Stellantis veteran Tim Kuniskis, head of the Ram brand, have either retired or been forced out in recent months.
Even Stellantis CEO Carlos Tavares appears to be at risk, as Headlight.News reported earlier this year. With the automaker facing a growing outcry from workers, investors and dealers, some believe the Portugese-born executive could face the axe if he can’t deliver improved earning and sales in the coming months.
Stellantis Chairman John Elkann confirmed this month that the company is looking at potential successors. The CEO’s current contract expires in 2026.
Are they now officially to be called the “Euro-American automaker?”
Will the others to be called the Dearborn-American and Warren-American automakers?