The sun is still not shining for Stellantis (STLA) .
During its earnings call for the first half of 2024, the Detroit Big Three automaker reported profit losses of more than 48% compared to the same period in 2023.
The multinational automaker's CEO, Carlos Tavares, blamed it on a "challenging industry context" and its own "operational issues" and stated that "significant work [...] especially in North America" has to be done "to maximize our long-term potential."
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Although the parent company of Dodge, Chrysler, Jeep and Ram has already started trimming jobs in key parts of its operations, its latest move has gotten the attention of the United Auto Workers union and not for a particularly good reason.
Stellantis
As per a report by Automotive News, Stellantis announced that it will lay off as many as 2,450 assembly line workers from the Detroit-area Warren Truck assembly plant.
According to the automaker, the layoffs are expected to be issued as soon as October 8, but they are expected to affect fewer people than the figure reported in documents filed with the state.
The move comes as the Ram Trucks brand ends production of the Ram 1500 Classic, a truck with origins dating back to 2009. The 1500 Classic moniker was introduced in 2019 and intended as a way to sell the previous-generation Ram 1500 as a more affordable, bare-bones option.
In a statement, Stellantis said its Ram brand is discontinuing the Classic as it refreshes its lineup of pickups for the 2025 model year.
"The Ram 1500 Classic has been a great entry point pickup for Ram, and the Tradesman model has well represented the needs of commercial truck customers for years," Stellantis said in a statement. "We introduced the new 2025 Ram 1500 Tradesman with incredible value and content."
The Warren Truck Assembly plant, which makes the Ram 1500 Classic, will shift to a one-shift schedule to focus solely on the $63,000 Jeep Wagoneer SUV, though the automaker says other operations will stay to support the luxury SUV's production.
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Shawn Fain is not impressed
Stellantis's Warren Truck Assembly plant employs around 3,900 employees, including 3,700 UAW members.
According to Stellantis, UAW members who will be affected by the layoffs will not leave empty-handed. The multinational automaker is offering full-time UAW-represented workers who are laid off indefinitely a year of supplemental unemployment benefits paid by the automaker, a year of transition assistance, and two years of health care coverage.
In addition, laid-off employees could also be eligible for Michigan state unemployment benefits.
No matter how Stellantis can spin it, UAW president Shawn Fain said that this is another example of corporate greed that throws ordinary workers like the ones he represents under the bus.
In a statement to Detroit-area Fox affiliate Fox 2 WJBK-TV, Fain ripped apart Stellantis CEO Carlos Tavares as the sole target of blame for the cuts.
"Stellantis CEO Carlos Tavares is a disgrace and an embarrassment to a once-great American company. While GM and Ford report fantastic profits and increased sales, Stellantis is going backwards. Meanwhile, Tavares jacks up his own pay by 56 percent while laying off thousands of autoworkers," Fain said in a statement to the station.
"The American taxpayer has invested in Stellantis. Workers have invested in Stellantis. Consumers have invested in Stellantis. It’s time for Stellantis to invest in us."
Related: Stellantis threatens layoffs amid poor earnings
Trimming the fat at Stellantis
The layoffs come as Stellantis attempts to clean up parts of its North American operations.
In a company email shared with white-collar employees late last month, Stellantis offered employees below the vice-president level a package called the "2024 Voluntary Separation Program," which is, in essence, a buyout package designed to shrink its workforce.
Though the term "voluntary" is in its name, the language used in the email to employees threatened drastic actions like layoffs would happen if not enough employees voluntarily take the buyout offers.
"We wanted to give you some advance notice so you can thoughtfully consider whether this opportunity might be of interest to you." Stellantis North America Senior Human Resources and Transformation VP Tobin Williams said.
"As always, we would prefer to meet our strategic headcount objectives through natural attrition and voluntary programs. Transparently, it is important to note that subsequent involuntary actions may be necessary if we do not meet our objectives through voluntary means."
Stellantis, which trades on the New York Stock Exchange as STLA, is down 0.42% from the opening bell and is trading at $15.24 at the time of this writing.
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