Stellantis Job Cuts: 400 Detroit Workers to be Laid Off in Cost-Cutting Move.
Introduction
In a significant development, Stellantis has announced the indefinite layoff of approximately 400 workers at its Freud Street logistics facility in Detroit. This decision is part of the company’s broader strategy to reduce costs and realign its U.S. operations for a stronger start in 2025. The Freud Street facility, which supports the Mack and Jefferson assembly plants, will be transitioned to a third-party service provider. This move comes amidst a challenging year for Stellantis, marked by declining sales and operational difficulties.
Stellantis, the parent company of brands like Chrysler, Dodge, Fiat, Jeep, and Ram, has been navigating a transitional year with a focus on improving its competitiveness in the U.S. market. The company has faced a 27% plunge in third-quarter revenue and a 20% drop in shipments compared to the previous year. These challenges have prompted Stellantis to implement a series of cost-cutting measures, including workforce reductions and production adjustments.
The Layoffs
The layoffs at the Freud Street facility will affect all workers at the parts sequencing facility, which is located near the Detroit Assembly Complex-Jefferson plant. The job cuts are set to take effect as early as January 5, 2025. Stellantis has stated that the decision to transition the operations to a third-party service provider is aimed at improving the competitiveness of the operation. The company has issued a Worker Adjustment and Retraining Notification (WARN) to local and state authorities about the layoffs.
Stellantis Job Cuts: 400 Detroit Workers to be Laid Off in Cost-Cutting Move.
The layoffs have been met with mixed reactions from employees and labor unions. The United Auto Workers (UAW) union, which represents the workers at the Freud Street facility, has criticized the decision, attributing the layoffs to short-sighted management decisions rather than market conditions. The UAW has expressed its readiness to use every tool in its arsenal to fight back against the layoffs. Stellantis has assured that impacted employees will receive one year of supplemental unemployment benefits in combination with state unemployment benefits, which together equal 74% of their normal pay. Additionally, healthcare coverage will be provided for two years.
The layoffs at the Freud Street facility are part of a larger trend of workforce reductions at Stellantis facilities across the U.S. Earlier this year, the company announced the indefinite layoff of 1,100 workers at its Toledo South Assembly Plant, where it will move from a two-shift to a one-shift operating pattern. In August, Stellantis also cut as many as 2,450 unionized jobs at its Warren Truck facility as it ended production of the Ram 1500 Classic truck. These measures reflect the company’s efforts to address its operational challenges and improve its financial performance.
Stellantis CEO Carlos Tavares has been at the forefront of the company’s cost-cutting initiatives. Tavares recently shook up his top management and announced that he would retire after his contract ends in early 2026. In a statement, Tavares emphasized the need to realign the company’s U.S. operations to ensure a strong start to 2025. He acknowledged the difficulties faced by the company but expressed confidence in its ability to overcome these challenges and return to profitability.
The layoffs have drawn attention from politicians and the public, with some expressing concern about the impact on local communities and the broader economy. President-elect Donald Trump has warned that he would place a 100% tariff on Stellantis if the automaker tried moving U.S. jobs to Mexico. The UAW has also criticized the company for its handling of the layoffs, arguing that Stellantis has prioritized shareholder payouts over investments in its workforce.
As Stellantis continues to navigate its operational challenges, the company is focused on implementing its cost-cutting measures and improving its competitiveness in the U.S. market. The transition of the Freud Street facility to a third-party service provider is a key part of this strategy. The company is also working to reassure its employees and the public that it remains committed to its long-term goals and the well-being of its workforce.
