CEO resignation triggers Stellantis decision to halt layoffs
In a surprising turnaround, Stellantis announced it has reversed its decision to lay off approximately 1,100 employees at the Toledo South Assembly Plant in Ohio. The Franco-Italian automaker’s decision comes less than three weeks after the abrupt resignation of its CEO, Carlos Tavares.
Initially slated to begin indefinite layoffs on January 5 due to a previously announced shift reduction, Stellantis has opted to extend a worker adjustment and retraining notification (WARN) notice instead. A company spokesperson confirmed in a statement that employees are expected to resume work as scheduled in the new year.
The reversal follows the sudden departure of Tavares, whose resignation reportedly stemmed from disagreements over what some board members considered "unrealistic or destructive" operational targets. Tavares had been at the helm of the world’s fourth-largest automaker, which owns prominent brands such as Jeep, Ram, Fiat, and Peugeot.
Under Tavares, Stellantis emphasized cost-cutting measures to counter slipping sales in North America, a region critical to the company’s profitability due to the popularity of its Jeep and Ram vehicles. However, these measures have sparked controversy, including workforce reductions and facility shutdowns.
Last month, Stellantis announced plans to lay off employees at the Toledo South Assembly Plant, which manufactures the Jeep Gladiator. The decision was part of a broader effort to improve operational efficiency and reduce inventory across its North American operations.
Additionally, the company has enacted several workforce reductions this year, including laying off 400 workers at a Detroit automotive parts facility and up to 2,450 employees at a Michigan plant as it ended production of the Ram 1500 Classic truck. While voluntary buyouts have reduced the salaried workforce, job cuts among manufacturing employees represented by the United Auto Workers (UAW) union have garnered significant political and public attention.
The United Auto Workers (UAW) union has been vocal in its criticism of Stellantis' workforce reduction strategies. UAW President Shawn Fain has threatened a nationwide walkout, alleging that Stellantis has not upheld promises made to the union.
Stellantis, however, maintains that it is abiding by the terms of its contract with the union. The company’s decision to reverse the Ohio layoffs may be seen as a strategic move to ease tensions with the UAW, which has been increasingly critical of job cuts impacting its members.