STLA - Stellantis to cut jobs at two U.S. Jeep plants amid emissions regulations and sales declines
2023-12-08 04:51:25 ET
As part of a cost-saving initiative, Stellantis ( NYSE: STLA ) announced plans to cut jobs at two Jeep manufacturing facilities in the United States.
This involves a temporary shift reduction at its Mack Avenue plant in Detroit, which manufactures two- and three-row Jeep Grand Cherokee sport utility vehicles and hybrids, as well as trimming jobs in Toledo, which produces the Wrangler SUV and Jeep Gladiator pickup.
Stellantis is attributing its decision to reduce Jeep production, in part, to California's emissions regulations, anticipating adverse sales effects, especially due to potential lower gas-powered vehicle sales in California and other states.
The company has even filed a petition against these regulations, claiming they unfairly disadvantage Stellantis.
The automaker is also facing a decline in Jeep brand sales, partly driven by high interest rates that have made premium SUVs like Jeep less accessible to consumers. Jeep sales fell 4% in Q3, marking the ninth consecutive quarterly decline, and are down 9% year-on-year through September.
The Detroit and Toledo assembly plants, which employ over 10,000 workers, are scheduled to commence layoffs as early as February 5th. Stellantis has already filed legal notices about the upcoming job losses in compliance with the Worker Adjustment and Retraining Notification Act, which requires a 60-day warning of mass layoffs.
This announcement comes just few weeks after the United Auto Workers ratified its new labor agreement , which was touted as a "record" deal.
Earlier this year, the automaker signaled its intent to undertake cost-cutting measures in response to a revenue loss of ?3B ($3.24B) incurred due to the U.S. strikes.
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Stellantis to cut jobs at two U.S. Jeep plants amid emissions regulations and sales declines