Stellantis, a prominent automotive manufacturer, recently announced its decision to temporarily lay off 900 hourly workers across its five facilities in the US. This move comes in response to the newly implemented tariffs that have significantly increased the cost of auto imports and disrupted production operations across North America.
The company will be suspending production at its Windsor Assembly plant in Canada for a period of two weeks, impacting nearly 4,500 employees. Additionally, the Toluca Assembly plant in Mexico will halt vehicle production for the entire month of April, although employees will still be required to report to work and will continue to receive their salaries.
The tariffs, which were expanded to a 10% baseline on all imports by the Trump administration, have also led to a 25% increase on auto imports. This has created challenges for companies like Stellantis, as they struggle to maintain profit margins in the face of these additional costs.
In a letter addressed to employees, Stellantis highlighted the need to assess the medium- and long-term effects of the tariffs on their operations, while also taking immediate actions to address the current situation. Romaine McKinney III, president of the local union chapter representing workers at Stellantis’ stamping plant in Warren, Michigan, expressed deep concern over the tariff-related layoffs, describing the situation as “pure devastation.”
The repercussions of these layoffs have not only affected the workforce but have also impacted Stellantis’ stock performance, with shares falling by 9.3% in New York on April 3rd. This decline was also observed in other major automotive companies such as General Motors, Ford, and Tesla.
The five facilities affected by the layoffs include Stellantis’ Warren Stamping, Sterling Stamping plants, Indiana Transmission plant, Kokomo Transmission plant, and Kokomo Casting plant. This move contradicts the long-term promise made by Trump to bring jobs back to the US, as it has resulted in immediate job losses.
In addition to the layoffs, Stellantis has initiated a voluntary buyout program for select US factory workers at facilities in Detroit, Ohio, and Illinois. This program aims to reduce expenses in anticipation of upcoming challenges in 2024.
Overall, the automotive industry is facing significant challenges due to the impact of tariffs on imports, leading to disruptions in production and workforce layoffs. Stellantis and other companies are navigating through these turbulent times as they strive to find solutions to mitigate the effects of these economic pressures.
