Stellantis made a “disgraceful” move at the expense of UAW workers

The sun still doesn’t shine 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 automaker’s CEO, Carlos Tavares, blamed “a challenging industry context” and its own “operational issues” and said there was “significant work to be done (…), particularly in the Americas North”, “to maximize long-term potential.”

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Although the parent company of Dodge, Chrysler, Jeep and Ram has already begun cutting jobs in key parts of its operations, its latest move has drawn the attention of the United Auto Workers union, and not for particularly good reason.

2024 Ram 1500 Classic

Stellar

According to a report by Automotive News, Stellantis has announced that it will lay off up to 2,450 assembly line workers at the Warren Truck assembly plant in the Detroit area.

According to the automaker, the layoffs are expected to be issued as soon as Oct. 8, but are expected to affect fewer people than the number reported in state filings.

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 name was introduced in 2019 and intended as a way to sell the previous generation Ram 1500 as a more affordable model . , bare-bones option.

In a statement, Stellantis said its Ram brand is discontinuing the Classic as it refreshes its pickup lineup for the 2025 model year.

“The Ram 1500 Classic has been an excellent pickup for Ram, and the Tradesman model has represented the needs of commercial truck customers well 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 switch to a single-shift schedule to focus exclusively on the $63,000 Jeep Wagoneer SUV, though the automaker says other operations will remain to support SUV production- the luxury one.

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Shawn Fain is not impressed

The Stellantis Warren Truck Assembly plant employs approximately 3,900 people, including 3,700 UAW members.

According to Stellantis, UAW members who will be affected by the layoffs will not walk away empty-handed. The multinational automaker is offering full-time workers represented by the UAW who are laid off indefinitely one year of additional unemployment benefits paid by the automaker, one year of transition assistance and two years of health care coverage.

Additionally, laid off employees may also be eligible for Michigan state unemployment benefits.

Regardless of how much Stellantis can spin, UAW President Shawn Fain said this is another example of corporate greed throwing ordinary workers like the ones he represents under the bus.

In a statement to Detroit-area Fox affiliate Fox 2 WJBK-TV, Fain tore into Stellantis CEO Carlos Tavares as the sole target of blame for the cuts.

“Stellantis CEO Carlos Tavares is a disgrace and a disgrace to a once great American company. While GM and Ford report fantastic profits and increased sales, Stellantis is going backwards. Meanwhile, Tavares raises his salary by 56% while laying off thousands. of auto workers,” Fain said in a statement to the station.

“The American taxpayer invested in Stellantis. Workers invested in Stellantis. Consumers invested in Stellantis. It’s time for Stellantis to invest in us.”

Related: Stellantis threatens layoffs amid weak earnings

Cutting fat at Stellantis

The layoffs come as Stellantis tries 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 essentially a buyout package designed to shrink its workforce.

Although the word “voluntary” is in its name, the language used in the email to employees threatened drastic action, such as layoffs, if not enough employees voluntarily accepted the buyout offers.

“We wanted to give you advance notice so that you can carefully consider whether this opportunity might be of interest to you.” Tobin Williams, senior vice president of human resources and transformation, Stellantis North America.

“As always, we would prefer to meet our strategic staffing goals 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 goals 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 writing.

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