In its thus far unsuccessful pursuit of profitability, automaker Stellantis announced on Friday that it would “indefinitely” lay off up to 2,450 union employees at its Warren Truck Assembly Plant. The plant moved from two shifts daily to one shift last month.
The fallout from suppliers was immediate, with seat maker Bridgewater Interiors LLC announcing it would permanently lay off 63 workers.
Last month, Stellantis announced buyout offers for its eligible non-union, salaried staff, citing inflationary pressure and the reluctance of the car buying public to purchase electric vehicles after an earnings report that showed a decline of 48% through the first six months of 2024,
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The union layoffs will begin as early as October. The company says the move was prompted by Stellantis’ decisions to discontinue production of its Ram 1500 Classic and shift focus to the Jeep Wagoneer.
“With the introduction of the new Ram 1500, production of the Ram 1500 Classic at the Warren [Michigan] Truck Assembly Plant will come to an end later this year,” the company said in an emailed statement received by the Detroit News.
According to Crain’s Detroit, “Full-time UAW-represented workers who are laid off indefinitely will receive a year of supplemental unemployment benefits paid by the company, a year of transition assistance and two years of health care coverage. Employees also could be eligible for state unemployment benefits.”
Embattled UAW President Shawn Fain immediately lashed out at Stellantis CEO Carlos Tavares.
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“Stellantis CEO Carlos Tavares is a disgrace and an embarrassment to a once-great American company,” Fain said in an emailed statement Friday night. “Meanwhile, Tavares jacks up his own pay by 56 percent while laying off thousands of autoworkers. If any autoworker did as piss poor of a job as Stellantis CEO Carlos Tavares, they would be fired.”
But Fain and the UAW are experiencing other issues. As reported by The Midwesterner in June, “Fain led the UAW in a six-week strike against Ford, General Motors, and Stellantis last year that saw the union emerge victorious with a record contracts. An attempt to unionize Volkswagen AG in Tennessee last year was also successful. [In May], however, Mercedes-Benz employees rejected the UAW effort to unionize the German automaker by a 56%-44% vote in what CNN described as “a blow to big UAW push.”
Additionally, Fain is the subject of an investigation conducted by a court-appointed federal watchdog who was appointed to monitor UAW activities to eliminate union corruption. The Detroit News reported Fain and other UAW officials are being investigated for obstructing and interfering with attempts to attain information regarding union activities. Those allegations, if true, would put the UAW in violation of a 2020 consent decree that “averted a full-scale takeover of the UAW by the Justice Department.”
Stellantis last month reported net profits of $6 billion through the first half of 2024, a figure that’s down 48% from the same timeframe last year. Net revenues of $92 billion was down 14%, results Tavares described as “disappointing and humbling,” according to the Detroit Free Press.
Mackinac Center for Public Policy Fiscal Policy Director James Hohman told The Midwesterner that Stellantis has been a major beneficiary of government subsidies. Hohman said Stellantis was offered $2,059,000,000 from Michigan taxpayers. This includes a $2 billion financial package that was approved during the Great Recession and expires in 2029, he said.