Stellantis Announces Upcoming Layoffs at U.S. Jeep Factories

Stellantis, maker of Jeep, to lay off factory workers in the US, citing productivity and sustainability concerns amid the shift to electric vehicles.

Ayesha Mumtaz
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Stellantis Announces Upcoming Layoffs at U.S. Jeep Factories

Stellantis Announces Upcoming Layoffs at U.S. Jeep Factories

Stellantis, the maker of Jeep vehicles, has announced plans to lay off an undisclosed number of factory workers at its U.S. plants in the coming months. The company cites the need to enhance productivity and ensure long-term sustainability in a rapidly changing global auto market as the primary reasons for the workforce reduction.

The layoffs have already begun, with Stellantis cutting 199 full-time positions at its Sterling Heights Assembly Plant in Michigan, which produces the popular Ram 1500 pickup truck. This follows earlier layoffs of white-collar workers at the automaker this year. "These actions will help improve productivity and ensure the company's long-term sustainability in a rapidly changing global market," Stellantis stated.

Stellantis CEO Carlos Tavares has emphasized the need for the company to reduce costs globally in order to keep electric vehicles affordable for the middle class. Electric vehicles currently cost about 40% more than their gasoline-powered counterparts. The automaker is facing increased capital spending to transition its lineup from gasoline to electric vehicles, while also dealing with declining U.S. sales in the first quarter of 2024 and higher costs from a new contract agreement with the United Auto Workers union.

Why this matters: The layoffs at Stellantis highlight the challenges traditional automakers face as they navigate the shift to electric vehicles and adapt to changing market conditions. The impact on workers and local communities could be significant, underscoring the broader economic implications of the auto industry's transformation.

The United Auto Workers union has criticized the layoffs, with local union president describing the move as "disappointing, disgusting and a disservice" to employees. The union has also pointed out the disparity between the job cuts and the 56% pay increase received by Stellantis' CEO. As of the end of 2023, Stellantis had about 271,000 employees globally, with 35 manufacturing facilities in North America, including 22 in the U.S.

Key Takeaways

  • Stellantis to lay off unspecified number of US factory workers to boost productivity.
  • 199 full-time jobs cut at Michigan plant producing Ram 1500 pickup trucks.
  • Stellantis CEO cites need to reduce costs to keep electric vehicles affordable.
  • Layoffs impact workers and communities amid auto industry's transition to EVs.
  • UAW union criticizes job cuts, citing disparity with CEO's 56% pay increase.