Stellantis (STLA) , the parent company behind well-known American nameplates like Jeep, Dodge, Chrysler, and Ram Trucks, has been through some changes since the huge automaker reported dramatic first-half earnings losses in July.
Since then, the automaker, which has 14 global brands, has enacted major cost-cutting measures, shifted around its C-suite, and begun to chip away at its major inventory problems.
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However, Stellantis's Q3 2024 performance shows that the roller coaster ride is far from over, with global revenues falling 27% and worldwide new car sales falling 20%.
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In an analyst conference call, the automaker's newly appointed CFO Doug Ostermann explained how it is tackling inventory from the dealer's side by adding incentives to older and late models and directly working with dealers to find ways to get people into the showrooms.
Stellantis
Stellantis's necessary trims put factory workers in the crosshairs
Besides tackling inventory problems from the dealer side, Stellantis is taking a more active role in identifying and reducing the production of slow-selling models.
Unfortunately, these actions will result in factory workers being laid off.
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In a recent statement, Stellantis revealed that the days are numbered for 1,139 workers at its Toledo Assembly Complex in Ohio, as they face indefinite layoffs as soon as Jan. 5.
The automaker says the layoffs are necessary because it plans to scale down production at the plant that produces Jeep's Wrangler off-roader and Wrangler-based Gladiator pickup. The two-shift operation at the South plant will downsize to one shift to accommodate a production cut of the Gladiator, the company said.
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Stellantis said that the move is part of broader operations realignment in the U.S. that ensures "a strong start to 2025."
Seeing 2024 as a "transitional year," the automaker aims to "reduce high inventory levels by managing production to meet sales," in essence, preventing itself from making too many Gladiators than it can sell at the dealers.
"These are difficult actions to take, but they are necessary to enable the Company to regain its competitive edge and eventually return production to prior levels."
As per UAW guidelines in its 2023 contract, Stellantis will provide affected workers with a year of supplemental unemployment benefits alongside any eligible state unemployment benefits, totaling 74% of their regular pay. Additionally, affected workers will receive a year of transition assistance and healthcare coverage for up to two years.
Slumping Jeep sales are forcing Gladiators to the bargain bin
Despite being a well-received vehicle from auto critics, including being featured on Car and Driver's 10Best list in 2020, slowing sales of the Jeeps, as well as the Gladiator are influencing drastic measures from Stellantis.
According to Stellantis, Jeep brand sales in Q3 2024 are down 6% from the year prior, with combined year-to-date sales down 8%. In Q3 2024 alone, Gladiator sales fell 35% from the year prior, and 21% combined year-to-date.
These numbers reflect Stellantis and Jeep dealers' urgency to move cars and are reflected in customer-facing incentives and discounts. At the time of this writing, Jeep's website reflects that the 2024 model-year Gladiator pickup price has been lowered by 10% from $37,895 to $34,106.
Related: Jeep, Dodge factory workers are newest victim of Stellantis cuts
The urge to combat its inventory woes can also be attributed to the automaker's earlier actions at other plants that make Jeep vehicles.
In late October, Stellantis' "necessary actions to align production with sales" affected over 5,096 workers at its Detroit Assembly Complex-Jefferson plant.
From Oct. 28 through Nov. 1, the factory that makes the Jeep Grand Cherokee and Dodge Durango ground to a halt to prevent overcrowding of unsold models at its dealerships.
Stellantis NV, which trades on the New York Stock Exchange as STLA, is up 1.26% from the opening bell and is trading at $14.04 at last check.
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