Stellantis (STLA), the automaker behind brands like Jeep, Ram, and Fiat, has announced plans to lay off about 1,100 employees at its Toledo, Ohio, plant, effective January 5, 2025. The company said that the cuts will affect its South plant, where the Jeep Gladiator is produced. With this move, STLA aims to improve efficiency and reduce inventory across North American operations.
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It is worth highlighting that the layoffs come as the company is transitioning the Toledo South Assembly Plant from a two-shift to a one-shift operation, reflecting the need to lower production levels due to decreasing regional demand.
This follows a similar decision at Stellantis’s truck assembly plant in Warren, Michigan, where the company plans to discontinue production of the Ram 1500 Classic later this year. This will allow the company to focus on newer models like the 2025 Ram 1500 Tradesman.
Stellantis Faces UAW Backlash Over Job Cuts
The United Auto Workers (UAW) union, which represents the affected workers, has expressed strong opposition to these job cuts. UAW President Shawn Fain has warned of a possible nationwide strike at Stellantis factories, claiming the company broke promises about investments in U.S. facilities, including a battery plant and a factory in Belvidere, Illinois.
Despite this, Stellantis has reaffirmed its commitment to the labor agreement with the UAW. According to the 2023 contract with the UAW, the company will provide laid-off workers with a year of supplemental unemployment benefits, along with additional transition help and healthcare coverage for two years.
Is STLA a Good Stock to Buy Now?
Turning to Wall Street, STLA stock has a Moderate Buy consensus rating based on nine Buys, seven Holds, and two Sells assigned in the last three months. At $22.19, the average Stellantis price target implies a 60% upside potential. Shares of the company have declined 36.4% year-to-date.
