Temporary layoffs hit two Stellantis plants amid sales and inventory problems

Stellantis NV is scaling back production and temporarily laying off workers at two major U.S. plants as it grapples with lower sales and bloated inventories.

At the Warren Truck Assembly Plant near Detroit, Stellantis is cutting production from two to one daily shift for July, resulting in a temporary layoff of roughly 1,600 workers, or about half the facility's workforce.

The reason is tied to sales of the Wagoneer and Grand Wagoneer, said Eric Graham, who leads United Auto Workers Local 140, which represents workers at the facility. The plant also makes the Ram 1500 Classic pickup.

"Stellantis is adjusting the operating pattern at its Warren Truck Assembly Plant to align production with sales," said a Stellantis statement sent by spokesperson Jodi Tinson. "The plant will run one shift for the month of July. The company will continue to monitor demand and take the necessary action to balance inventories."

Meanwhile, production of the Gladiator at the Toledo Assembly Complex in Ohio is expected to be fully idled for a six-week stretch of July and August, a Monday UAW letter to members said.

"Toledo South (Gladiator) will be down starting the week of July 8 and resuming production the week of August 19 to align production with sales, retool the plant for a new model and observe a week for summer vacation," said a Stellantis statement from Tinson. "Employees will be reassigned to support production at the Toledo North (Wrangler) plant during this period, except during their summer vacation the week of Aug. 5."

However, the UAW letter says that Gladiator workers are also expected to be laid off for the first two weeks of the six-week stretch that Gladiator production is down, before they start helping out on Wrangler production.

Gladiator production levels were already lower in recent weeks, with workers sometimes pitching in on building Wranglers, due to slowing demand for the pickup, union officials and workers have said.

Employees assigned to the Wrangler side of the plant will also go on a two-week shutdown starting next Monday, said the UAW letter. The Toledo plant employs roughly 5,000 hourly workers total.

Summertime plant shutdowns lasting a week or two aren't unusual as carmakers look to do maintenance and make preparations for new models. But the longer-term plans to pull back production of the Gladiator, Wagoneer and Grand Wagoneer is tied to slower-than-expected sales of the models, and large inventories that have accumulated on dealer lots in recent months.

In second quarter results released Tuesday, Gladiator sales were down 24% year-over-year, to 10,489, continuing a recent trend. Wrangler fell by 17%, to 38,896 sold.

Wagoneer and Grand Wagoneer were both up year-over-year, by 107% and 24% respectively, among the few bright spots for Stellantis in the quarter, though total sales of the two big SUVs added up to just 20,739 units. Graham said the hope is that orders start picking up soon, and there were positive signs in recent days, but not enough to bring the shift back.

Graham said Stellantis also recently gave a 30-day notice that it planned to cut the third shift in Warren Truck's Wagoneer paint shop. The approximately 150 full-time workers on that shift will get moved to the assembly area, he said, which means about 120 supplemental workers, or temps, who now work on assembly are expected to be cut.