Stellantis warns thousands in US of potential job cuts

BUILDING FIAT-EV'S IN EUROPE FOR US MARKET!

AFP
Fri, December 8, 2023 

More than 1,200 workers at Stellantis' Ohio factory were notified of potential job cuts (Sarah Rice)


Stellantis has notified thousands of workers in the US states of Ohio and Michigan of potential layoffs, attributing the move partly to California rules that limit where vehicles can be sold.

The European automaker on Thursday notified 2,455 workers in Detroit and 1,225 in Ohio of potential job loss under the federal Warn Act, which requires early notification of major layoffs.

The company expects the actual number of layoffs to be "much lower" than the Detroit figure and "slightly lower" than the Ohio number, said Stellantis spokeswoman Jodi Tinson.


"Due to the complexity of our bargaining agreement related to the placement of affected employees, Warn notices were issued to more employees than will ultimately be impacted out of an abundance of caution to give employees notice even if not legally required," Tinson told AFP in an email.

The notification hits the Midwestern states only weeks after workers at Stellantis and fellow Detroit giants General Motors and Ford ratified sweeping new wage increases following a roughly six-week strike organized by the United Auto Workers union.

The job cuts affect Stellantis' Mack assembly plant in Detroit, where the Grand Cherokee and hybrid Grand Cherokee 4xe are assembled; and the Toledo Assembly plants where the Jeep Wrangler and hybrid Jeep 4xe are put together.

The moves at the plants are to "manage sales of the vehicles they produce to comply with California emissions regulations that are measured on a state-by-state basis," said a Stellantis statement.

On Wednesday, Stellantis filed a formal challenge with the California Office Administrative Law of state air board policies that it argues unfairly disadvantage the European company.

Stellantis is currently sending only the hybrid versions of its vehicles to dealer lots in California and 13 other states that follow the mandates set down by the California Air Resources Board (CARB).

This has meant that in certain periods, Stellantis has only sold internal combustion engine vehicles in California in response to customer orders, Stellantis attorneys said in the December 6 letter to the administrative board.

Conversely, the company has at times limited hybrid models to customer orders, meaning "dealers could not place certain vehicles on their lots for customers to view and test drive," Stellantis said in the letter.

In July 2019, California announced an agreement with four Stellantis rivals -- Ford, Honda, Volkswagen and BMW -- in response to then President Donald Trump's effort to freeze emissions rules.

CARB's "continuing exclusion" of Stellantis subjects the company to a "double standard," which also threatens "the livelihoods of our 56,000 US employees," the company said.

str-jmb/md

Stellantis Blames Job Cuts at Jeep Plants on California Emissions Rules

Keith Laing and Gabrielle Coppola
Thu, December 7, 2023 at 7:14 PM MST·3 min read




(Bloomberg) -- Stellantis NV is eliminating a shift at a Jeep plant in Detroit and cutting jobs at its Toledo, Ohio, Jeep assembly complex, a move the company blamed on strict emissions standards adopted by California and more than a dozen other states in 2019.

Stellantis announced Thursday it will temporarily cut a shift at its Mack Avenue plant in Detroit, which makes two- and three-row Jeep Grand Cherokee sport utility vehicles and hybrids, and trim jobs in Toledo, which produces the Wrangler SUV and Jeep Gladiator pickup.

Stellantis said it was cutting Jeep production in anticipation of potentially lower sales of gas-powered vehicles in California and other states. The company filed a petition against California regulators Wednesday arguing the state’s rules put the company at a disadvantage versus competitors.

The moves come as automakers are pushing back on the Biden administration’s efforts to increase fuel economy and spur faster adoption of electric vehicles. Automobile industry trade groups have said stricter rules would cost them billions in fines, while dealers warn that EV demand is softening.

Stellantis’ predecessor, Fiat Chrysler Automobiles NV, sided with the Trump administration it its fight to take away California’s legal right to set its own emissions standards. That position resulted in it being left out of the less stringent deal the California Air Resources Board, or CARB, struck with four carmakers — Ford Motor Co., Volkswagen AG, Honda Motor Co. and BMW AG.

Layoff Notices

Stellantis said it would file notices Thursday to state and local governments under the federal WARN Act, which requires employers with 100 or more workers give 60 days’ notice of plant closings or mass layoffs. The company declined to specify how many jobs would be affected; the two plants combined employ just over 10,000 people.

Stellantis’s Wednesday petition alleged that California improperly adopted a 2019 deal negotiated by state regulators and four carmakers that allowed those manufacturers to voluntarily increase the average fuel economy of their fleets to about 50 miles per gallon (80 kilometers) by the end of the 2026 model year.

While Stellantis has lagged behind other automakers in the conversion to EVs, its Jeep Wrangler 4xe hybrid is the fourth best-selling electrified vehicle in California this year through September, and its Chrysler Pacifica hybrid is 13th on the list.

At the same time, all three big Detroit automakers are looking to cuts costs after they agreed to contracts with record pay increases following the United Auto Workers’ strikes this year.

Lys Mendez, communications director for CARB, said the agency expects California’s Office of Administrative Law would recognize the agreements with the carmakers “for the settlements that they are” and dismiss Stellantis’ petition. The UAW did not immediately respond to a request for comment.

Sales Slump

Stellantis is also wrestling with shrinking sales at its prized Jeep brand as high interest rates put its premium SUV out of reach for more consumers.

Jeep brand sales fell 4% in the third quarter, the ninth consecutive quarterly decline, Stellantis reported in October. Sales were down 9% this year through September. Jeep named a new head of North America and picked a new global brand head last month.

The 2019 emission deal between California and the four carmakers is widely seen as a model for a subsequent Biden administration rule adopted in 2022. That rule now requires carmakers to increase their average fuel economy to about 49 miles per gallon by 2026.

Despite the fact that the national rules will require roughly the same fuel economy as California’s standards, Stellantis says manufacturers in the 2019 deal can meet the standards based on their nationwide sales, while excluded automakers are measured by sales in the states that follow the California rules. This, a company spokesperson said, necessitated the moves announced on Thursday.

Bloomberg Businessweek

Stellantis Says California's to Blame for Making It Harder to Buy an ICE Jeep

Adam Ismail
Thu, December 7, 2023

Stellantis Says California's to Blame for Making It Harder to Buy an ICE Jeep photo


Stellantis has formally lodged a petition against the California Air Resources Board (CARB) for subjecting it to stringent emissions requirements that not all automakers are required to meet. It's the latest chapter in a saga that has impacted the Chrysler, Jeep, Ram, and Dodge vehicles available for sale across the country, that Stellantis said in a statement "destabilizes our production schedules, the livelihoods of our 56,000 U.S. employees, and the thousands of spinoff jobs generated by our operations."

First, some background. Over the summer, Stellantis confirmed it was allocating only electrified versions of its vehicles, when possible, to dealer lots in the 14 CARB-compliant states. What this meant is that if you happened to shop in one of those states, the only Wranglers or Pacificas readily in stock were plug-in hybrid vehicles. Pure internal-combustion variants of those models were still available, but they had to be special-ordered for a customer. Meanwhile, dealers in non-CARB states suffered the opposite scenario: few or no hybrids stocked for people to buy and drive away same day, and a predominantly gas-only inventory.

Dodge Hornet R/T

The reason Stellantis moved to do this was because of CARB rules. Under its regulations, most manufacturers are required to sell a certain percentage of zero-emissions vehicles and plug-in hybrids within those 14 states. That's why Stellantis has prioritized sending such vehicles to those areas of the country. The sticking point for Stellantis is, a group of automakers that signed the department's "framework agreement" in 2020—BMW, Ford, Honda, Volkswagen, and Volvo—get to play by different rules. For those automakers, compliance is measured by sales nationwide, not just in CARB states. And that makes those numbers much easier to hit.

You may ask why Stellantis didn't just join 'em, if they couldn't beat 'em. It tried. According to the company's petition, it applied for the framework group in 2021 but was "barred" from entry. And, the way Stellantis sees it, this was a form of punishment because it publicly questioned California's authority to set its own regulations back in 2019 when the Trump administration was vying to undermine CARB. Stellantis, then just Fiat Chrysler, wasn't alone at the time; General Motors and Toyota were on the same side of the fight. On the other was BMW, Ford, Honda, and Volkswagen, if it's any surprise.

Regardless of the cause, Stellantis' position today is that CARB's selective rules violate the California Administrative Procedure Act (APA) by creating an alternate, favorable criteria for certain players, and that the board also violated the company's First Amendment rights by rejecting Stellantis due to arguments made against California regulators in the past. "If CARB had gone through the APA procedures, it would have had to publicly explain and justify the classification of OEMs into a two-tiered regulatory structure, and the regulated community would have had the opportunity to comment on the issues it would create," the petition reads.

Jeep Wrangler 4xe Willys

It's not surprising that Stellantis and GM would've opposed CARB back when it seemed there was an outside chance they wouldn't be forced to play by its rules, which are more stringent than the EPA's national criteria. Both SUV- and truck-centric automakers reportedly paid the government record fines for exceeding Corporate Average Fuel Economy limits in the final years of the previous decade, according to Reuters.

But for Stellantis, these hurdles are still affecting what the company can sell to customers right now in every state, in one manner or the other. A Stellantis representative told The Drive that "because of the disparities created by our exclusion from the Framework Agreement, our inventories of unsold electrified vehicles in California have become excessive." They also added that "excluding companies from the Framework Agreement is forcing Stellantis to undertake a production strategy that pits 'California states' against 'non-California states,'" decreasing product availability in some markets and hampering the company's EV rollout, which it's investing $35 billion in.