Automaker Stellantis plans to indefinitely lay off up to 2,450 American factory workers later this year as the company ceases production of the base version Ram 1500 Classic pickup truck in Michigan. This move is part of Stellantis’ latest action to reduce inventory surplus among U.S. dealers.
According to the Transport Topics website, the layoffs are expected to begin as early as October 8, giving union members the opportunity to seek jobs at other factories during this period.
On August 9, Stellantis announced it would halt production of the base version Ram 1500 Classic truck at its Warren, Michigan plant, but will continue producing the Jeep Wagoneer and Grand Wagoneer. The factory will transition from a two-shift system to a single-shift system, employing a total of 3,700 United Auto Workers (UAW) union workers.
The updated Ram 1500 will be manufactured at a nearby plant, which will continue operations as planned.
In an email statement reported by CNBC, the company said, “With the introduction of the new Ram 1500, production of the Ram 1500 Classic at the Warren, Michigan truck assembly plant will end later this year.”
Stellantis CEO Carlos Tavares has been implementing layoffs and reducing production capacity at U.S. factories due to a significant drop in sales in the American market, leading to a substantial decrease in company profits. This year, Stellantis has also taken measures to help dealers clear automotive inventory, including lowering prices and reinstating incentive policies.
According to the company’s report in July, second-quarter sales of Ram pickups dropped by 23%, with year-to-date sales up to June declining by 20%. Overall sales in the United States decreased by 21% compared to the same period last year.
Stellantis’ disappointing performance in the first half of the year may result in involuntary layoffs if there are not enough employees willing to participate in buyout programs.