Stellantis is moving forward with layoffs in a factory near Detroit after closing the door to a company classic. The company is all set to lay off over 2,450 workers as a result of its decision to end production of one of its products, the Ram 1500 Classic truck. The factory workers from the Warren Truck assembly plant are to be affected by the layoffs as this was the main center for the production of the soon to be discontinued vehicle.
After the poor performance of the Classic truck, the company has set its sights on the production of the updated version of the vehicle, the 2025 Ram 1500 Tradesman truck, which is produced at a different facility in Sterling Heights.
Image: Stellantis CEO Carlos Tavares at the Paris Automotive Summit 2022
Stellantis Factory Workers Confronted by Layoffs after Automaker Calls It Quits on a Product Line
Over 2,450 factory workers will be affected by the Stellantis layoffs, of the 3,900 workers at the factory. The Ram 1500 pickup truck that is being discontinued was initially designed to provide a more affordable alternative to customers who did not want to spend as much on a vehicle or for those who were entry-level buyers with less specific needs from their pick-up truck. Workers will still be tasked with the production of the Jeep Wagoneer and Grand Wagoneer which are also produced at the Warren Truck factory so the layoff won’t affect all the factory workers at the location.
The company provided a statement highlighting the changes “As a result, Stellantis announced today that the plant will move from a two-shift to a one-shift operating pattern in General Assembly.” There is still work to be done, but the demand for workers will be considerably lower.
This isn’t the first round of layoffs that the company has seen this year. Stellantis Detroit layoffs were announced earlier in July when the company temporarily laid off around 1,600 workers after changing the production shifts in a similar strategy as the present change.
Last month, the company began offering buyouts to its salaried workforce across the U.S. after it started to focus more attention on cost-cutting measures at the company. According to CNBC, Stellantis was offering the voluntary separation program to “nonunion U.S. employees at the vice president level and below in certain functions.”
When Stellantis’ buyout strategy was announced, the company made it clear that it would turn to involuntary terminations if enough employees did not voluntarily leave the organization. Stellantis’ factory worker layoffs are likely a continuation of the same strategy to cut costs and boost profits after disappointing first-half results. The automotive has seen many fluctuations in recent times, especially challenged by the EV industry.
Apple similarly laid off workers after its own work on an EV car came to an end and the team was no longer required at the organization. Tesla also laid off a significant number of workers but the company still dominates in the electric vehicle category.
More on the Warren Truck Layoff
The Stellantis factory workers who are affected by the layoffs will have some benefits available to them. According to Reuters, there are over 3,700 workers who are all represented by the UAW. These union members will have 52 weeks of supplemental unemployment benefits and 52 weeks of transition assistance. The workers will also have two years of healthcare coverage, which should be very helpful during this transition period.
The United Auto Workers union has had a very rough few months since their big win in Detroit against the Big Three—Ford Motors, Stellantis, and General Motors. Despite the success in having the company meet the union demands, the UAW Mercedes vote did not work out in the UAW’s favor and the leaders are currently under federal investigation.
Responding to the Stellantis factory workers’ layoffs recently, UAW President Shawn Fain called the CEO of Stellantis a “disgrace” to the company and pointed out the impact on the workers while executives were still getting raises. Despite the comments, Stellantis will be moving ahead with the Detroit layoffs and will likely make more changes among salaried workers to accommodate the changes planned for the company.
