Stellantis is preparing to cut 2,450 jobs by the end of the year, following the decision to discontinue production of the Ram 1500 Classic model at the Warren plant in Michigan. The new 2025 Ram 1500 Tradesman will be produced in a different factory, leaving Warren with only one production shift. The consequences will therefore be inevitable for about 2,450 of the 3,900 workers employed at the plant. Stellantis’ announcement, made just a few days ago, highlights the difficulties of the automaker, which has decided to reduce the number of production shifts due to slow sales and rising operating costs in North America.
Stellantis takes action after negative period in the United States: 2,450 employees at risk
Layoffs will begin as early as October 8, with the reduction to a single shift at the Ram pickup plant in Warren. Carlos Tavares, CEO of Stellantis, emphasized the need to reduce operating costs, noting that at least one of the North American plants is operating below expectations.
Economic difficulties have led to a decline in the group’s profits, which fell by almost half in the first six months of 2024, settling at about $6 billion. Tavares described the first-half results as “disappointing and humbling,” but assured that the company is working to resolve operational issues and regain ground.
The decision to lay off is linked to the transition to a new version of the Ram pickup, which will be produced at the Sterling Heights plant in Michigan. Stellantis indicated that the actual number of affected workers could be less than the 2,450 anticipated. There is a possibility that some may be transferred to other factories or later return to the Warren plant. It is certain, however, that several workers could be permanently laid off, receiving a year of unemployment benefits supplemented by state assistance.
The United Automobile Workers (UAW) union has not yet commented on Stellantis’ announcement. Last year, the union had managed to secure the reopening of a plant in Belvidere, Illinois, which Stellantis had planned to close, leaving 1,350 employees jobless.
Stellantis was born in 2021 from the merger between Fiat Chrysler and Peugeot SA. Carlos Tavares had promised that the new company would find synergies to increase profits compared to the two separate companies. In 2023, Stellantis had achieved a record profit of 18.6 billion euros, thanks mainly to sales of Jeep and Ram pickups in the United States. However, in the last 12 months, the company has produced more vehicles than have been sold. This has led to an increase in inventory and a need to offer discounts that have reduced profit margins. Additionally, a Ram seat supplier has announced that it will lay off part of its staff starting in September following the end of Ram 1500 Classic production.