Members of the United Auto Workers union picket a Jeep factory on September 18, 2023 in Toledo, Ohio.
Sarah Rice | Getty Images
Detroit — Automobile Manufacturer star announced plans Wednesday to cut production shifts at its Ohio Jeep plant and lay off about 1,100 workers indefinitely.
The company has been struggling with high inventory levels lower income This year, the South Toledo Assembly Plant decided to cut production to one shift, which will better align output with demand for the Jeep Gladiator pickup, the plant’s only product.
Stellantis said in an email: “As Stellantis moves through a transitional year, the focus is on realigning its U.S. operations to ensure a strong start in 2025, which includes taking difficult but necessary actions to manage production by to meet sales to reduce high inventory levels” statement.
Stellantis said the layoffs will take effect as early as January 5. The automaker announced the layoffs while also sending required notices to government agencies under the Worker Adjustment and Retraining Notification Act.
The United Auto Workers union, which represents workers at the Stellantis plant, did not immediately respond for comment.
According to company regulations 2023 contract signed with UAWStellantis said it will provide laid-off workers with one year of supplemental unemployment benefits equal to 74% of their wages combined with any qualifying state unemployment benefits, followed by one year of transition assistance. Health care coverage will also last for two years.
Stellantis and its Jeep brand are trying to execute a turnaround plan after years of declining U.S. sales. Jeep is a coveted brand in the automotive industry and sales in the U.S. have remained steady, including Sales fell for five consecutive yearsexpected to become the sixth by 2024.
The plan includes lowering prices across its product line, including on high-volume models like the Jeep Compass and Grand Cherokee SUV; rolling out special offers such as incentives or 0% financing; and increasing marketing and advertising spending.
Jeep’s U.S. sales plummeted 34% from a record high of more than 973,000 SUV sales in 2018 to less than 643,000 last year. While most car brands saw sales increase last year, Jeep sales fell about 6%.
