Stellantis, Jeep and Ram maker, lays off more than 1,000 Detroit workers

Stellartis, the parent company of the Chrysler, Jeep, Dodge and Ram brands, is laying off 1,100 workers in Warren, Michigan.

And that's not all: As the company struggles with declining sales, Stellantis will “implement indefinite layoffs representing employees across its footprint,” a spokeswoman said in an email. He said the company would not comment on how many other workers would lose their jobs.

The Warren Truck Assembly Plant makes the Ram 1500 Classic, which is being discontinued after this model year, as well as the Jeep Wagoneer and Grand Wagoneer. Stellantis said Warren's layoff, first announced in August, will begin Saturday. It added that they were the result of the end of production of the Ram Classic.

The layoffs are expected to affect the company's U.S. workforce, which includes about 52,000 people, 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 in operation since 1938 and has produced more than 16 million vehicles.

Fancy cars and falling profits

S&P Global Ratings writes that A combination of “headwinds and operational missteps” — business jargon for bad luck and bad decisions — held Stellantis back.

Jessica Caldwell, head of insights at auto data company Edmonds, said a misstep by Stellantis was that the company moved toward making expensive, fancy vehicles — the Jeep Grand Wagoneer starts at more than $91,000 — just as consumers were becoming frustrated with high prices more broadly. Besides being bad timing, he argues, it was never a good fit for a brand like Jeep.

“Jeep is such a rugged, do-anything, go-anywhere, very basic American brand,” Caldwell says.

But what vehicle is Stellantis releasing now?

“They are expensive. They are chic,” she says. “And it seems to have kind of missed the mark in terms of where people are now.”

Earlier this year, Walter P. One of Chrysler's great-grandsons said he wants to buy back the Chrysler and Dodge brands and revive them. Stellantis “politely declined,” Detroit Free Press writes.

But Stellantis knows that something is deeply wrong. When a company makes cars that people don't want — or can't afford — to buy, the result is predictable: a glut of unsold cars. Angry dealers. Profits are falling. Stellantis is fighting all three.

To be clear, Stellantis turned a profit in the first half of 2024, but that profit was down 48% from the same period in 2023. CEO Carlos Tavares promised “corrective steps” especially for North America.

In a call with reporters this summer, Tavares was asked about the possibility of Detroit getting fired. “You have to make sure you protect the sustainability of your company by making margins,” he said in his response.

That is, Tavares wants to protect Stellantis' profits. And since the company can't raise prices — in fact, it has to lower them, if it hopes to sell the vehicles it already makes — that leaves one option. Reduce costs.

Stellantis and the UAW are fighting

Stellantis is in a bitter dispute with the United Auto Workers over other labor issues. The company agreed to reopen a shuttered plant in Belvidere, Ill., in recent negotiations with the union. This has delayed plans to revive the factory to produce a mid-size truck with EV batteries. Although Stellantis said it stands by its commitment to “identify a solution for Belvidere,” the UAW said the delay puts reopening outside the scope of the current contract, making it renegotiated.

The union blamed the company's decision on “total mismanagement,” while Stellantis claimed it was industry-wide unrest and slow EV adoption that caused the change in plans.

This is not idle finger pointing; There are many risks. In its new contract, the union won the right to strike midterm contracts for certain changes to production plans — unless the decision is due to market forces beyond the company's control. There are unions Threatened to strike In this case, it's called “Stellantis Keep the Promise” with a campaign for members. Stellantis said It is complying with the new contract, and has filed lawsuits to block any such strike.

In a new twist, Stellantis has publicly announced that it is rejecting a union offer to support workers affected by the delay. The company said what the union wanted was similar to the “jobs bank” used by the UAW, where automakers continue to pay workers their salaries while factories are idle. In the 2000s the practice “had a staggering cost,” Stellantis wrote, and “the company will not consider reinstating contract provisions that directly contributed to the bankruptcy of two of the 'Big 3.'

The UAW fired back.

“In just the past 9 weeks, Stellantis has completed $1 billion in stock buybacks for a total of $3 billion in stock buybacks this year,” union president Sean Fein wrote. “Our proposal will cost a fraction of the cost and go directly to the autoworkers who built this company.”

of NPR Andrea Huh Contribute to this report.