Stellantis is scaling back production at Jeep plants in Detroit and Toledo, OH.
The automaker says it is modifying operations at the plants in part to manage sales of the Jeep-brand vehicles they produce to comply with California emissions regulations and to restructure work schedules per its new contract with the UAW.
Stellantis confirms it is sending layoff notices to hundreds of employees at its Detroit Assembly Complex-Mack in Detroit, where versions of the Jeep Grand Cherokee are assembled, and the Toledo Assembly Complex where the Jeep Wrangler and Gladiator are built.
The Mack plant will temporarily move from three shifts to two. Toledo will move from an alternative work schedule to a traditional two-shift schedule as agreed upon during this year’s UAW negotiations, the automaker says in a statement.
“Because both of these changes will result in job losses, effective as early as Feb. 5, 2024, the Company will issue WARN (Worker Adjustment and Retraining Notification) notices on Dec. 7, 2023, to the respective state and local governments as well as the UAW. Although WARN may not ultimately be applicable to these job losses, out of an abundance of caution, we are taking this action to give employees notice even if not legally required,” the statement says.
The notices list 2,455 employees at the Mack complex who may be affected and 1,225 workers at Toledo, Stellantis spokeswoman Jodi Tinson tells the Detroit Free Press.
Plans to cut production stem from restrictions on vehicle sales at dealerships in California and 13 other states, most on the east and west coasts, which follow mandates set down by the California Air Resources Board (CARB).
Dealers in those states can stock Jeep Grand Cherokee 4xe and Wrangler 4xe plug-in hybrid models but can only sell internal-combustion Jeeps to customers who have specifically ordered them. The 4xe PHEVs are the only electrified Jeep models. Stellantis is petitioning CARB for relief, claiming it and its dealers are being unfairly penalized because they are being limited in the vehicles they can sell.
Meanwhile, dealers in non-CARB states are getting fewer or no hybrids stocked for people to buy and drive away the same day, according to observers. Some automakers, notably Ford, Honda, Volkswagen, BMW and Volvo, are allowed to continue selling ICE-powered trucks and larger SUVs in California and other CARB states because they signed a “framework” agreement with authorities in California rather than side with Trump Admin. efforts to void the California emission rules.
California’s emission rules, which have spurred the drive toward electrification, have been a source of fierce political debate for more than two decades. Efforts to change the rules in the California Legislature have gone nowhere, given the influence of environmentalists.
The Trump Admin. tried but ultimately failed to change California’s rules. Republicans in the U.S. House of Representatives are making another effort to limit the impact of the California and CARB rules, which now effectively cover 40% of the U.S. light-vehicle market.
The new schedules at the Detroit and Toledo plants also reflect UAW efforts to improve employees’ “work-life balance” by reducing “alternative” shifts such as those in place at Toledo where full-time union members choose how many hours they want to work each week. A traditional two-shift operation will be implemented at Toledo in February.
Stellantis CEO Carlos Tavares says the automaker will focus on reducing inventories of unsold vehicles. “Having too much inventory at the dealer level is not good,” he says. Stellantis currently sits on a 100-day supply of unsold Jeeps.