Stellantis, the parent company of Chrysler, Jeep, Dodge and Ram brands, is laying off 1,100 employees in Warren, Michigan.
And that's not the end: as the company grapples with declining sales, Stellantis "will be implementing indefinite layoffs of represented employees across its footprint," a spokeswoman said in an email. She said the company would not comment on how many more workers would lose their jobs.
The Warren Truck Assembly Plant manufactures the Ram 1500 Classic, which is being discontinued after this model year, as well as the Jeep Wagoneer and Grand Wagoneer. Stellantis said the layoffs in Warren, first announced in August, will begin on Saturday. It added that they are the result of the end of production of the Ram Classic.
The layoffs are expected to have ripple effects across the company's U.S. workforce, which includes according to Stellantis. Some production workers at the Warren plant, particularly those with seniority, may be reassigned to other plants, potentially displacing recent hires at those facilities.
The Warren Truck Assembly Plant has been operating since 1938, and has produced more than 16 million vehicles.
Fancy cars and falling profits
S&P Global Ratings a combination of 鈥渉eadwinds and operational missteps鈥� 鈥� business-speak for bad luck and bad decisions 鈥� are holding Stellantis back.
Jessica Caldwell, the head of insights at the auto data company Edmunds, says that one of Stellantis鈥� missteps is that the company moved toward making pricier, fancier vehicles 鈥� the Jeep Grand Wagoneer starts at more than $91,000 鈥� just as consumers started getting frustrated with higher prices more broadly. In addition to being bad timing, she argues, it was never a great fit for a brand like Jeep.
鈥淛eep is sort of that rugged, do-anything, go-anywhere, very basic American brand,鈥� Caldwell says.
But the vehicles Stellantis is putting out now?
鈥淭hey're expensive. They're flashy,鈥� she says. 鈥淎nd it seems like it's kind of missing the mark in terms of where people are right now.鈥�
Earlier this year, a great-grandson of Walter P. Chrysler said he wanted to buy back the Chrysler and Dodge brands and revive them. Stellantis 鈥減olitely declined,鈥� the Detroit Free Press .
But Stellantis knows something is deeply wrong. When a company is making cars people don鈥檛 want 鈥� or can鈥檛 afford 鈥� to buy, the consequence is predictable: A glut of unsold cars. Angry dealers. Dropping profits. Stellantis is grappling with all three.
To be clear, Stellantis turned a profit in the first half of 2024, but that profit was down 48% from the same time period in 2023. CEO Carlos Tavares promised 鈥渃orrective actions,鈥� especially for North America.
In a call with reporters this summer, Tavares was asked about the likelihood of Detroit layoffs. 鈥淵ou have to make sure that you protect the sustainability of your company by generating margins,鈥� he said in his response.
That is, Tavares intends to protect Stellantis鈥� profits. And since the company can鈥檛 raise prices 鈥� in fact, it needs to lower them, if it expects to sell the vehicles it鈥檚 already made 鈥� that leaves one option. Reducing costs.
Stellantis and the UAW are fighting
Stellantis has been in a bitter dispute with the United Auto Workers about other labor issues. The company agreed in recent talks with the union to reopen a shuttered plant in Belvidere, Ill. It has since delayed plans to revive the factory to produce a mid-sized truck along with EV batteries. While Stellantis says it stands by its commitment 鈥渢o identify a solution for Belvidere,鈥� the UAW says the delay puts the reopening outside the scope of the current contract, making it once again subject to negotiation.
The union blames the company鈥檚 decisions on 鈥済ross mismanagement,鈥� while Stellantis claims it is industry-wide volatility and slowing EV adoption that鈥檚 causing plans to shift.
This isn鈥檛 idle finger-pointing; there鈥檚 a lot at stake. In its new contract, the union won the right to strike mid-contract over some changes in manufacturing plans 鈥� unless the decision was due to market forces outside the company鈥檚 control. The union has in this case, with a campaign to members it鈥檚 calling 鈥淪tellantis Keep the Promise.鈥� Stellantis it鈥檚 abiding by the new contract, and has filed lawsuits to block any such strikes.
In a new twist, Stellantis publicly announced it was rejecting a union proposal to support workers affected by the delay. The company said what the union wanted was similar to the 鈥淛obs Bank鈥� the UAW used to have, where automakers continued paying workers their salaries when factories were idle. In the 2000s the practice had 鈥渁 staggering cost,鈥� Stellantis wrote, and 鈥渢he company will not consider reestablishing contract provisions that directly contributed to the bankruptcies of two of the 鈥楤ig 3.鈥欌��
The UAW fired back.
鈥淚n just the last 9 weeks, Stellantis has pissed away $1 billion in stock buybacks for a total of $3 billion in stock buybacks this year,鈥� union president Shawn Fain wrote. 鈥淥ur proposal would cost a fraction of that and would go directly to the autoworkers who have built this company.鈥�
NPR's contributed to this report.
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