Stellantis is planning to lay off an unspecified number of workers in its US factories in the coming months to cope with a rapidly changing global auto market, the group announced Tuesday. The announcement comes after Stellantis laid off 400 white-collar workers in the US last month.
Stellantis to continue US layoffs following those announced last month
The statement comes as the company faces rising costs to transition from gasoline-powered vehicles to electric cars. It also reported a decline in US sales in the first quarter and higher costs due to a new contract agreement reached last year with the United Auto Workers union. Stellantis has around 43,000 factory workers. “These actions will help improve productivity and ensure the company’s long-term sustainability in a rapidly evolving global market,” the statement said.
The company did not provide details on when the indefinite layoffs will begin, or give specific reasons, but according to Automotive News, Stellantis laid off 199 full-time workers on Monday at its Ram pickup truck plant in Sterling Heights, Michigan. Ram pickup sales fell 15% in the first quarter of 2024, with 89,417 units sold, compared to the previous year. Overall, Stellantis US sales were down 10% in the quarter.
Stellantis CEO Carlos Tavares said his company needs to work on reducing costs globally to keep electric vehicles affordable for the middle class. Electric vehicles, he said, cost about 40% more than gasoline-powered ones. Without cost reductions, EVs will be too expensive for the middle class, shrinking the market and further driving up costs, Tavares said.