Stellantis, the carmaker, has announced plans to reduce its workforce at two Jeep plants in the United States. The company is taking this step to control costs, following a wave of layoffs across the auto industry.
The job cuts are a direct result of emissions regulations in California and will be implemented at assembly plants located in Detroit and Toledo, Ohio. The reduction in workforce is expected to begin as early as Feb. 5 and will impact over 10,000 employees.
Stellantis states that the stringent emissions regulations imposed by California will have a negative impact on sales, thereby necessitating cost-cutting measures. Earlier this year, the Netherlands-based company reported a loss of 3 billion euros ($3.24 billion) in revenue due to production disruptions caused by strikes in the United States.
This move by Stellantis is in line with other companies in the automotive industry that are looking to reduce expenses. Analysts predict slower growth in the coming year, driven by economic uncertainty and stable-to-downward production volumes. Volkswagen Group recently announced plans to cut labor costs by 20% as part of a EUR10 billion savings initiative, while German car-parts supplier Continental revealed job cuts as part of its restructuring efforts.
According to company reports, Stellantis's U.S. sales decreased by 2% in the third quarter compared to the same period last year. Notably, Jeep sales witnessed a decline of 4%. Overall, U.S. group sales remain approximately 33% lower than 2018 levels, according to Cox Automotive.
These job cuts at Stellantis were initially reported by Reuters.
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