Stellantis Will Lay Off Up to 2,450 at Michigan Truck Plant

Stellantis announced plans on Friday to lay off as many as 2,450 workers later this year at a pickup truck plant near Detroit, the latest sign of trouble for the trans-Atlantic automaker.

The layoffs are expected to begin as early as Oct. 8 at the Ram truck plant in Warren, Mich., where production will be reduced to one shift from two, the company said on Friday.

Stellantis’s chief executive, Carlos Tavares, has said the company needs to cut costs, and he has noted that at least one North American factory was operating at an unsatisfactory level.

The company has been hit by sluggish sales in North America, where it generates most of its profits, as well as bloated costs and manufacturing inefficiencies. It reported last month that profits in the first six months of 2024 fell by nearly half to 5.6 billion euros (about $6 billion).

“It is an understatement to say that the first-half 2024 results were disappointing and humbling,” Mr. Tavares said on a call with analysts after the earnings report. “This is a bump on the road that we are now fixing and that we are going to fight against to make sure that we can rebound from here, and that we fix the operational issues that we face.”

The layoffs are related to a planned transition to a new version of the Ram pickup that is just going into production at a plant in Sterling Heights, Mich. The Warren plant will continue making an older version of the truck on one shift, the company said on Friday, adding that the actual number of workers affected will probably be lower than the 2,450 noted in a report to the state of Michigan.

While some laid-off workers could be moved to other plants or return to the Warren factory at some point, the company acknowledged that some would be let go permanently. Employees who leave the company will be offered a year of unemployment benefits that supplement any assistance they receive from the state.

The United Automobile Workers union had no immediate comment on the Stellantis announcement. In contract talks with the company last year, the union won the reopening of a plant in Belvidere, Ill., which the company announced in late 2022 that it planned to close, with the potential loss of 1,350 jobs.

Stellantis was formed in the 2021 merger of Fiat Chrysler and the French company Peugeot S.A. In North America, it sells vehicles under the Chrysler, Jeep, Ram and Dodge brands. Its brands in Europe and other parts of the world include Peugeot, Citroën, Fiat and Opel.

Mr. Tavares, 65, a Portuguese engineer who has spent most of his career in France’s auto industry, has promised that the combined company would find economies of scale to deliver greater profits than its two halves had generated on their own.

Last year, it looked as if Mr. Tavares was delivering. In 2023, Stellantis reported a record profit of €18.6 billion, with much of it coming from the sale of Jeeps, Ram pickups and other trucks in the United States.

But for about the last 12 months, Stellantis has been producing more vehicles in North America than its customers are buying, and its inventories have grown, forcing the company to offer discounts that cut into its profit margins.

In July, Mr. Tavares said Stellantis was aiming to cut €50 million in costs in North America by the end of the year. “We still have ahead of us a lot of cost-saving actions,” he said.