Cost-cutting is what’s hot across the industry right now, and Stellantis is making moves to layoff workers across their North American business operations.
Automakers’ latest earnings calls for the third quarter hammered on one common thread: Cut costs, cut costs, cut costs. Stellantis, in particular, is waging a crusade to reduce its overhead as CEO Carlos Tavares aims to stem losses in North America throughout this year. To that end, after cutting thousands of jobs throughout the past three months — including cutting 2,450 jobs at Stellantis’ Warren Truck plant after discontinuing the Ram 1500 Classic and laying off as many as 1,100 workers from Jeep’s Toledo, Ohio plant that manufactures the Gladiator and Wrangler last week — another 400 workers at a logistics facility will lose their jobs, according to a statement from a company spokesperson to the Detroit Free Press Friday.
The Freud Street material logistics facility in Detroit employs union workers represented by the United Auto Workers (UAW), and help manage supply chain concerns for the Detroit Assembly Complex plants, including the Mack and Jefferson facilities. As layoffs continue to mount across the company’s North American operations, Stellantis contends the reductions are necessary to improve its fortunes in the new year.
“To improve the competitiveness of the operation, the Company will transition the Freud Street sequencing facility to a third-party service provider, which will result in indefinite layoffs of approximately 400 represented employees,” the spokesperson said. The layoffs will take effect as early as January 5, 2025.
The UAW, for its part, said in its own statement that Stellantis’ layoffs are “a direct result of short-sighted management decisions”, rather than prevailing market conditions. “Ford and GM aren’t facing these issues. Stellantis has showered its shareholders with over $8 billion this year, yet claims it can’t invest in Toledo and Detroit? It’s unacceptable. Our members are ready to build Jeeps, but management’s missteps are standing in their way.”
Stellantis announced leadership changes in the past few weeks, and it’s not the only one facing headwinds.
Prior to this latest round of layoffs, Stellantis made waves a few weeks ago by announcing Tavares’ departure by 2026. Other notable figures also take on new duties, like Jeep CEO Antonio Filosa, who has now been appointed as North America’s chief operations officer.
Nissan is another automaker recently making headlines for its cost-cutting plans. In the wake of weaker-than-expected sales in the U.S. and China, the company will eliminate 9,000 jobs across its global operations. It will also reduce its worldwide manufacturing output by 20% and executives including CEO Makoto Uchida will take substantial pay cuts. All of these efforts, the company contends, are meant to steady the ship and make its operations more competitive in the upcoming year and beyond.
Automakers further face a tumultuous landscape with existing tariffs or the threat of further levies on imports for the U.S. market. In late September, current President Joe Biden’s administration placed tariffs on certain Chinese-built products, including a 100% rate on electric vehicles, as well as 50% on solar cells and 25% on batteries, critical minerals to produce batteries, and other car-building materials like steel and aluminum. President-elect Donald Trump has threatened a 100% tariff on Stellantis and other automakers who engage in moving American jobs to Mexico, though Toyota is pushing ahead with a $1.45 billion investment into its two primary Mexican plants, despite the rhetoric.
In short, automakers already face headwinds trying to chart their course over the coming months and years, and it remains to be seen whether we’ll hear of further job reductions (though it seems likely, given the current climate) and cost-cutting measures over the next few quarters.
