A Massive US Car Company Is Now Laying Off Thousands

August 17, 2024

A massive US car company is now laying off thousands of plant workers as it discontinues production of an iconic truck.

Stellantis, a major automaker, is planning to lay off approximately 2,450 of workers at its U.S. factories.

This decision comes as the company prepares to stop production of an older version of its popular Ram 1500 pickup truck, known as the “Classic.”

The Classic model was designed as a more affordable option for entry-level buyers and fleet customers, while the newer generation of the Ram 1500 was introduced in 2018.

The Classic Ram 1500 is currently built alongside the Jeep Wagoneer and Grand Wagoneer at the Warren Truck Assembly Plant near Detroit.

The newer Ram 1500, which recently received updates for the 2025 model year, is produced at a different facility nearby and will continue production as scheduled.

Stellantis has confirmed that production of the Classic Ram 1500 will end later this year, but they have not yet announced any plans to replace the truck.

This lack of a replacement plan has raised concerns among local governments, workers, and the United Auto Workers union, which represents the plant workers.

Ram CEO Chris Feuell told CNBC last week that the “Classic” version of the pickup would be phased out by the end of this year.

UAW President Shawn Fain was critical of Stellantis leadership regarding the cuts.

“Stellantis CEO Carlos Tavares is a disgrace and an embarrassment to a once-great American company,” Fain said in an emailed statement Friday night.

“Meanwhile, Tavares jacks up his own pay by 56 percent while laying off thousands of autoworkers.

If any autoworker did as piss poor of a job as Stellantis CEO Carlos Tavares, they would be fired.”

The layoffs are expected to start as soon as October.

The final number of indefinite layoffs at the Warren plant, which currently employs about 3,700 hourly workers, may be lower than the announced numbers.

Some employees may be given other jobs or positions at other plants.

The layoffs are the latest for Stellantis, which has cut production at several plants amid sales issues and cost-cutting measures.

Tavares has been on a cost-cutting mission since the company was formed through a merger between Fiat Chrysler and France’s PSA Groupe in January 2021.

It is part of his “Dare Forward 2030” plan to increase profits and double revenue to 300 billion euros, or $325 billion, by 2030.

The automaker last week offered a broad voluntary buyout to U.S. salaried workers in an effort to reduce headcount and costs.

Stellantis, which reported disappointing first-half results last month, said if not enough employees participate in the buyout, involuntary terminations could follow.

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Applications for unemployment benefits now surge to new highs, a sign that the white-hot labor market is starting to cool off.

First-time applications for unemployment benefits rose last week to 231,000, the highest level since August, per CNN.

Thursday’s data also showed that the number of continuing claims, or applications from people who have filed for unemployment for at least one week, was 1.78 million.

That’s an increase of 17,000 from the prior week, according to the Bureau of Labor Statistics.

The latest numbers come less than a week after the monthly jobs report showed the US economy added just 175,000 positions in April, less than economists expected and a steep drop-off from prior months.

US employers have now added an average of 245,500 jobs per month, versus 2023’s 251,000-per-month average.

Still, hiring remains strong. Although the unemployment rate ticked up to 3.9% last month, it’s the 27th consecutive month that the jobless rate has held under 4%, matching a streak last seen in the late 1960s.

Weekly jobless claims data tends to be volatile but, while one week’s worth of data “does not a trend make,” said Chris Rupkey, chief economist at Fwdbonds.

“We can no longer be sure that calm seas lie ahead for the US economy if today’s weekly jobless claims are any indication.”

“Company layoffs are picking up, hinting at caution on the part of companies as they weigh the outlook for the second half of the year,” he wrote in a note Thursday.

The Federal Reserve has been battling inflation by raising its key lending rate in the hopes of slowing the economy.

While the labor market has so far resisted those efforts, remaining white hot for the past 18 months despite 11 rate hikes from the central bank, Fed Chair Jerome Powell said last week that demand has “cooled from its extremely high level of a couple of years ago.”

Ian Shepherdson at Pantheon Economics said in a note Thursday: “We’d need to see at least a month of elevated readings to convince us that the trend really has turned.”

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Also Read: Retirees Will Now Receive More Money For Social Security

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