Stellantis warned in August it would lay off as many as 2,450 hourly workers. The first batch just got their walking papers as 1,100 employees at its Warren Truck Plant, just north of Detroit. However, the cost cutting doesn’t stop there as the company revealed plans to shut down its Arizona Proving Grounds as well.
Stellantis laid off 1,100 workers at its Warren Truck Assembly Plant, just north of Detroit. The number is lower than expected due to Jeep Wagoneer production.
The 1,100 layoffs are a mixed bag of results as workers losing jobs is tough, but it’s less than half of what the company suggested it might be. The plant halted production of the Ram 1500 Classic, a lower-priced version of its full-size pickup. However, it continues to build the Jeep Wagoneer and Grand Wagoneer at the site.
The company’s full-size trucks are among the slowest selling vehicles in the industry, sitting on dealer lots more than 100 days. Overall sales are down 19.5% through the first six months of 2024. To clean up the excess, so to speak, the brand reduced its lineup, making the new Ram 1500 Tradesman the entry-level model. It’s built at the Sterling Heights Assembly Plant, which is less than 15 minutes north of the Warren Truck plant.
The company has a 97-day supply of 2024 Ram 1500s and a 243-day supply of 2025 models.
“With the introduction of the new 2025 Ram 1500 Tradesman, production of the Ram Classic came to an end at the Warren (Michigan) Truck Assembly Plant on Oct. 4,” Stellantis said in a statement. “As a result of this action, indefinite layoffs — as announced in August — began on Oct. 12 for approximately 1,100 employees, far fewer than the total number of employees who received [notices from the state].”
Shutting down Yucca
The first round of layoffs included 191 workers at the Stellantis plant in Sterling Heights, Michigan.
The automaker isn’t just relying on employee cuts to conserve cash. Stellantis plans to close and sell its 4,000-acre site in Yucca, Arizona. The closure will be complete by the end of the year, officials noted in a statement. There are 69 full-time employees at the proving grounds.
“Stellantis continues to look for opportunities to improve efficiency and optimize its footprint to ensure future competitiveness in today’s rapidly changing global market,” the company said in a statement. “As agreed to during 2023 UAW negotiations, the company is continuing to market the Arizona Proving Grounds for sale and therefore, will cease use of the facility by the end of the year.
“The company is working with the UAW to offer proving ground employees special packages or they can choose to follow their work in a transfer of operations. Alternatively, employees could be placed on indefinite layoff which would entitle them to pay and benefits for two years.”
Stellantis bought the facility from Ford Motor Co. in 2007 for $35 million. According to a CNBC report, Stellantis will conduct future testing at Toyota’s proving grounds in Wittman, Arizona, outside Phoenix.
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Earlier layoffs
In addition to the 1,100 workers at Warren Truck, Stellantis cut 191 workers at the Sterling Heights plant, as part of its effort to go into “full execution mode” to mitigate falling sales and earnings.
Stellantis is also closing and selling its Arizona Proving Grounds facility to cut costs.
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.
“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 earlier job cuts in September.
“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.”
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