European auto giant Stellantis said on Thursday it would lay off 1,100 workers at its Jeep factory in Toledo, Ohio, in an effort to “regain its competitive edge” as it struggles with falling sales.
Stellantis, a 14-brand group that includes Peugeot, Fiat and Chrysler, said it would move from a two-shift to a one-shift operation at the Toledo South Assembly Plant in 2025.
Another 400 employees will be transferred to a “third-party service provider”, it added it a statement.
“These are difficult actions to take, but they are necessary to enable the Company to regain its competitive edge and eventually return production to prior levels,” the statement said.
Stellantis sales sank in the third quarter, with a 42 percent drop in North America alone.
The group offered promotional deals as US dealerships have struggled to reduce their inventories.
“As Stellantis navigates a transitional year, the focus is on realigning its US operations to ensure a strong start to 2025, which includes taking the difficult but necessary action to reduce high inventory levels by managing production to meet sales,” it said.
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The company’s stock is down about 39% this year.
CEO Carlos Tavares’ decision to slash manufacturing workers, such as those in Toledo, has angered the United Auto Workers union, which represents these employees.
UAW President Shawn Fain has threatened a nationwide walkout at Stellantis factories just a year after a six-week strike at the automaker and its Detroit competitors.
Fain highlighted Stellantis’ delays in a planned billion-dollar investment into a new battery plant and factory in Belvidere, Illinois as a sign it is breaking promises in a labor deal with the union last year.
Stellantis has said it is abiding by the terms.
The UAW didn’t respond to a request for comment about the indefinite layoffs in Toledo, which Stellantis said will be effective as early as Jan. 5.
The company’s workforce decisions drew the attention of Vice President Kamala Harris and President-elect
Donald Trump who told the automaker to keep jobs in the U.S.
Trump said last week he would put a 100% tariff on Stellantis if the automaker tried moving U.S. jobs to Mexico.
Affected employees at Toledo’s South Assembly Plant, which is moving to one shift from two, will get one year of supplemental unemployment benefits under the UAW contract, Stellantis said.
Reuters.com
