Stellantis is laying off thousands of workers at its Warren plant

After a disappointing performance in the first half of the year, Stellantis is continuing its cost-cutting measures by laying off 2,450 plant workers.

What’s happening: The layoffs will happen at the automaker’s Warren Michigan plant outside of Detroit, which currently produces the Ram 1500 Classic pickup truck alongside the Jeep Wagoneer and the Grand Wagoneer.  

• Last week, Ram CEO Chris Feuell told CNBC that the Ram Classic would be phased out of the brand’s lineup by the end of this year to make way for the refreshed 2025 Ram Tradesman.

• The automaker confirmed that the subsequent layoffs could begin as early as Oct. 8.

What’s more: Stellantis doesn’t have another vehicle to replace the Ram Classic on the Warren plant’s production line, drawing criticism from the United Auto Workers (UAW) union. The Ram Tradesman will be produced at an unaffected plant nearby.

Zooming out: Stellantis has accelerated its cost-cutting measures since the company signed a historic contract with the UAW last year. Between December 2019 and the end of 2023, the company has reduced its workforce by around 15%, or 47,500 workers. It’s continuing the trend in 2024.

• In March, Stellantis cut 400 U.S. engineering, technology, and software jobs.

• The automaker’s Toledo plant in Ohio has been reduced to one shift since July 8 and is expected to resume Aug. 19.

• At the end of July, Stellantis announced it would offer voluntary buyouts for “non-represented employees at the VP level and below in certain functions.”

At a crossroads: Stellantis is having an underwhelming year so far, largely due to the mismatch between the brand’s high amount of inventory and slowing sales.

• “The Company’s performance in the first half of 2024 fell short of our expectations, reflecting both a challenging industry context as well as our own operational issues,” Stellantis CEO Carlos Tavares said.

• Revenue was down 14% year-over-year at $92 billion for the first half of 2024. Net profit shrank 48% to roughly $6 billion.

• Stellantis’ days’ supply levels exceed 150 days across all of the company’s mass-market brands – well above the industry average.

Bottom line: Stellantis is trimming the fat to navigate a tough market, but without a clear plan to fill the production void at its Warren plant, the automaker could face even more backlash from both workers and investors.

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