Stellantis (NYSE:STLA) stock is surprisingly in the green Friday despite announcing a series of sweeping job cuts at several of its Jeep plants. So what do you need to know about the Stellantis layoffs?
On Thursday, Stellantis stated that it plans to temporarily cut a shift at one of its Detroit Jeep plants and make additional changes at its Ohio Jeep plant that will result in layoffs.
The automaker stated it is filing a Worker Adjustment and Retraining Notification notices with the relevant local governments and United Auto Workers Union (UAW) as it has listed nearly 2,500 workers who may be affected at the Mack plant branch of its Detroit Assembly Complex.
“The Detroit Assembly Complex – Mack plant will temporarily move from a three shift to a two-shift operating pattern. The two-shift operation also will allow the Mack team to focus its attention on improving the operational performance and throughput at the plant in the event that a change in the regulations or marketplace allows for an increase in volume,” a company news release states. “The Toledo Assembly Complex will move from an alternative work schedule to a traditional two-shift operating pattern as agreed upon during 2023 UAW negotiations.”
STLA Stock Unaffected by Stellantis Layoffs
The layoff news comes less than a month out from the ratification of a new contract that Stellantis’ UAW-represented employees voted for that includes higher wages, the reinstatement of cost-of-living allowance, and more.
Stellantis has stated the layoffs come as a means to comply with California emissions regulations. The company believes that the requirements put Stellantis at a disadvantage, as other automakers are held to looser compliance standards.
The automaker, which also owns car brands including Chrysler, Dodge, Fiat and Ram, has incurred the wrath of some politicians. Indeed, Michigan House Speaker Joe Tate, a Democrat representing Detroit, believes the announcement is worrying:
“Layoffs should be a decision of last resort and I encourage Stellantis to revisit reducing the number of shifts at the Mack Assembly Plant. In the meantime, those impacted by layoffs should not hesitate to contact my office for help in accessing available support during these challenging times.”
Interestingly, the news hasn’t soured investor sentiment. Indeed, STLA stock fell less than half a percent on Thursday, a loss that has since been recouped.
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.