DETROIT — Automaker Stellantis announced plans Wednesday to cut a manufacturing shift and indefinitely lay off roughly 1,100 workers at a Jeep plant in Ohio.
The company, which has been battling high inventory levels and lower earnings this year, said the decision at its Toledo South Assembly Plant to cut production to one shift will better align output with demand of the Jeep Gladiator pickup — the factory’s sole product.
“As Stellantis navigates a transitional year, the focus is on realigning its U.S. operations to ensure a strong start to 2025, which includes taking the difficult but necessary action to reduce high inventory levels by managing production to meet sales,” Stellantis said in an emailed statement.
The layoffs will be effective as early as Jan. 5, according to Stellantis. The automaker announced the layoffs in conjunction with required notices to government agencies under the Worker Adjustment and Retraining Notification Act.
The United Auto Workers union, which represents Stellantis employees at the plant, did not immediately respond for comment.
In accordance with the company’s 2023 contract with the UAW, Stellantis said it will provide laid off employees with one year of supplemental unemployment benefits in combination with any eligible state unemployment benefits, equalling 74% of their pay, followed by one year of transition assistance. Health-care coverage also will continue for two years.
Stellantis, including its Jeep brand, is attempting to execute a turnaround plan following a yearslong decline in U.S. sales. Jeep, a coveted brand in the automotive industry, has been in a U.S. sales rut that has included five years of annual sales declines, with 2024 on pace to potentially become the sixth.
The plan has included lowering pricing across its lineup, including on high-volume models such as the Jeep Compass and Grand Cherokee SUVs; rolling out special offers such as incentives or 0% financing; and increasing spending on marketing and advertising.
Jeep’s U.S. sales have plummeted 34% from an all-time high of more than 973,000 SUVs sold in 2018 to less than 643,000 units last year. While most auto brands increased sales last year, Jeep was off by about 6%.