If there is one singular person who currently has the hardest job in the automotive industry, it would probably be Carlos Tavares, the CEO of the multinational auto conglomerate Stellantis. (STLA)
Though managing 14 different brands, including Jeep, Chrysler, Dodge, and Ram Trucks, is a job in itself, this summer was one to remember for the automaker as it embarked on a journey of aggressive cost-cutting following dismal first-half 2024 earnings.
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On top of cost-cutting measures that include offering white-collar employees voluntary buyouts, the automaker's troubles also include massive inventory problems and scrutiny by dealers and the UAW for failing to meet their respective goals.
However, Stellantis is far from fully cushioning its fall, as its latest contribution to the madness affects some of its most well-known products.
Stellantis
Stellantis pauses production of two SUVs
In an announcement first seen by Mopar Insiders, Stellantis informed employees at its Detroit Assembly Complex-Jefferson plant of a temporary shutdown and layoffs that will occur this week.
The one-page note, titled "Important Notice of Layoff" informed plant workers that "no scheduled production" will take place at the factory from Oct. 28 through Nov. 1. Essentially, the factory, which makes the Jeep Grand Cherokee and Dodge Durango SUVs, will grind to a halt for those four days.
The note itself does not state a specific reason for the production shutdown, but according to Stellantis, about 5,096 workers represented by UAW Locals 7, 412, and 889 are located at the plant.
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In a statement sent to Motor1, a Stellantis spokesperson confirmed that the shutdown was happening and that it was occurring as an effort to prevent overcrowding of unsold models at its dealerships.
"Stellantis continues to take the necessary actions to align production with sales. This includes making production adjustments at the Detroit Assembly Complex-Jefferson," Stellantis said.
"The Company will continue to monitor the situation to assess whether further action is required."
Stellantis
Stellantis's Inventory Troubles
The factory shutdown is further evidence that the automaker is having a hard time trying to tackle its existing inventory problems.
According to an analysis by auto shopping website CarEdge, six out of the 10 slowest-selling cars in the U.S. belong to Stellantis properties, with some of the worst-performing cars having a nearly two-year supply rotting away on dealer lots across the country.
The worst of the lot is the Alfa Romeo Giulia sedan, which currently has a 617-day supply at Alfa Romeo dealers across the United States.
In new sales data released on Oct. 1, Stellantis reported that it sold 305,294 cars across its portfolio in the U.S. during Q3 2024 — a 19.8% drop from the same period last year and an 11.5% drop from the last quarter.
The automaker says that its "aggressive incentive program" of aggressive discounts implemented early in the quarter has moved the needle, with dealer inventory reduced by 50,000 units, or 11.6%.
“These cross-brand incentives, which will continue through the end of the year, also helped to deliver consecutive month total share growth in Q3 from 7.2% in July to 8% in September," Stellantis U.S. retail sales head Matt Thompson said in its statement.
"We continue to take the necessary actions to drive sales and prepare our dealer network and consumers for the arrival of 2025 models.”
Related: Jeep parent Stellantis is making huge sacrifices to save a few bucks
Stellantis is not afraid to cut loose ends
The factory shutdown is the latest act that demonstrates the extent to which Stellantis brass is willing to take to save a few bucks.
Recently, it laid off approximately 1,100 employees at its Warren Truck Assembly plant following the end of production of the Ram 1500 pickup earlier this month.
Additionally, it revealed plans to close one of its key research and development facilities, its proving grounds in Yucca, Ariz., by the end of 2024.
In a statement, the automaker said it "continues to look for opportunities to improve efficiency and optimize its footprint to ensure future competitiveness in today's rapidly changing global market."
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