AUTONEWS

Stellantis backtracks on plan to lay off 1,100 at US Jeep plant

Stellantis confirmed Saturday it was reversing a decision to lay off 1,100 workers at its Jeep plant in the US state of Ohio, following the ouster of embattled chief executive Carlos Tavares.

"No employees will be placed on indefinite layoff on January 5, 2025, due to the previously announced shift reduction. Employees are expected to return to work as scheduled after the new year," a Stellantis spokesperson told AFP.

The decision comes as "Stellantis continues to reassess its strategy in North America," the spokesperson added.

The automaker had announced the job cuts at the plant in Toledo, Ohio in early November, saying it was part of an effort to "regain its competitive edge" amid struggles with falling sales.

Stellantis, a 14-brand group that includes Chrysler, Peugeot and Fiat, had planned to trim operations at the Toledo South Assembly Plant from two shifts to one.

Another 400 employees were to be transferred to a "third-party service provider."

Stellantis sales sank in the third quarter, with a 42 percent drop in North America alone. The group offered promotional deals as US dealerships struggled to reduce their inventories.

But Stellantis has significantly revised its approach since Tavares's December 1 exit, with the new interim CEO giving guarantees to the French and Italian governments on maintaining its production and investments in both countries.

The French-Italian-American company had 258,000 employees worldwide at the end of 2003.

Fiat 500e: Stellantis’ Achilles heel...Stellantis has decided to extend the production pause of the Fiat 500e until January 20, as recently reported. This announcement comes after several interruptions on the assembly lines at the Mirafiori plant, located in northern Italy. The decision is in line with the expectations of the unions, who had been anticipating such a measure due to the low demand for electric vehicles in Europe.

At the historic plant where the Fiat 500 is produced, the challenges faced are significant. Production stoppages have been a constant throughout the year, resulting in the temporary furlough of workers. This scenario reflects a difficult time for the automotive industry in the region, which is facing a sharp drop in demand for its products.

Decline in Automotive Production in Italy...Automotive production in Italy has been experiencing significant declines. The number of vehicles manufactured this year is expected to fall below 500,000, a worrying figure, especially when compared to the 751,000 vehicles produced in 2023. According to experts, this drop makes this year the period of lowest production since 1958, demonstrating the depth of the crisis faced by the Italian automotive sector.

In addition, Stellantis announced an even longer shutdown until February 3, also affecting the production of Maserati sports models, which are manufactured in small volumes at the same facility. These adjustments reflect a strategy to respond to market challenges and seek to rebalance in the face of low demand.

What are Stellantis' Strategies for the Future?...In response to the challenges faced, Stellantis has presented a plan to the Italian government that aims to revitalize its automotive production in the country. This plan includes short- and medium-term measures to reverse the effects of the current slowdown. However, as highlighted by the Head of European Operations, Jean-Philippe Imparato, the positive impacts of these strategies are not expected to be felt before 2026.

The expectation is that, with the implementation of these new guidelines, Stellantis will be able to adjust its production in line with market demands, thus improving the performance and competitiveness of the Mirafiori plant in the coming years.

Market Impact and Outlook...The ongoing shutdown of the production of the Fiat 500e and other models in Mirafiori raises questions about the future of the automotive industry in Italy. The European electric vehicle market, which is still developing, presents both challenges and opportunities. Companies like Stellantis need to balance supply and demand effectively to thrive in an increasingly competitive market.

While the current figures are discouraging, Stellantis’ new strategies may offer a light at the end of the tunnel. The ability to adapt to new market trends and demands will be crucial in determining the company’s long-term success in Italy and in Europe in general.

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