Stellantis, the automaker behind the iconic Jeep brand, announced Wednesday that it will indefinitely lay off approximately 1,100 employees at its Toledo South Assembly Plant, which produces the Jeep Gladiator pickup truck. Facing high inventory levels and a dip in earnings, the company will reduce its production from two shifts to one, with the layoffs scheduled to take effect as early as January 5, 2024.
The layoffs, initiated under the federal Worker Adjustment and Retraining Notification (WARN) Act, follow a challenging period for the Gladiator, whose sales have been lagging. Stellantis reported that US sales of the pickup dropped by 21% year-over-year through the third quarter, leading the company to offer a 10% discount on the vehicle in an attempt to stimulate demand. The Toledo South plant’s shift reduction, Stellantis stated, aims to better align production with consumer demand.
“As Stellantis navigates a transitional year, the focus is on realigning its US operations to ensure a strong start to 2025… These actions are necessary to regain our competitive edge and ultimately return to prior production levels,” Stellantis said in a statement.
The layoffs arrive at a difficult time, affecting workers and their families just weeks before the holiday season. The United Auto Workers (UAW), which represents the employees at the plant, did not immediately issue a formal statement, but local UAW leaders conveyed their disappointment, particularly as the layoffs follow several temporary shutdowns throughout the year.
In compliance with its contract with the UAW, Stellantis has committed to providing affected employees with a year of supplemental unemployment benefits, which, combined with state benefits, will amount to 74% of their regular income. The company also pledged to continue healthcare coverage for two years and provide transition assistance for an additional year.
Toledo City Council President Carrie Hartman expressed concern about the broader effects on the city, highlighting the anticipated reductions in income tax revenue and local business activity.
“The loss of nearly 1,200 jobs will cut into the city’s budget and create ripple effects throughout our community,” Hartman said.
She added that the council would work with local agencies to support displaced workers and their families.
Lucas County Commissioner Lisa Sobecki echoed Hartman’s sentiments, warning of potential impacts on Jeep’s suppliers and other local businesses.
“People who work at Jeep are our neighbors, our family,” Sobecki said.
She emphasized that the county’s rapid-response team would connect affected workers with other employment opportunities and state support, given the challenges some have experienced navigating the unemployment system.
In light of these layoffs, Jeep’s U.S. leadership remains hopeful about long-term opportunities for the Toledo Assembly Complex. The Gladiator’s plug-in hybrid variant, known as the Gladiator 4xe, was expected to launch in late 2024, but this rollout has reportedly been delayed until 2025. Local UAW officials believe the hybrid Gladiator may help rejuvenate demand for the pickup in the increasingly competitive electric and hybrid market.
UAW Local 12 President Bruce Baumhower expressed optimism about the plant’s future. He mentioned that discussions to add a smaller, more compact pickup to the Gladiator’s assembly line could help offset the reduced Gladiator production, an idea that has been considered since the Gladiator’s launch.
With input from CNBC, the Blade, and the Detroit News.
