Stellantis, an automotive manufacturer, disclosed plans to temporarily layoff 900 hourly workers across its five facilities in the US.
This decision comes in the wake of newly implemented tariffs, which have increased the cost of auto imports and disrupted production across North America.
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The company will halt production at its Windsor Assembly plant in Canada for two weeks, affecting nearly 4,500 employees, reported Reuters.
The Toluca Assembly plant in Mexico will suspend vehicle production throughout April, however, employees will still report to work and receive their salaries.
The tariffs, expanded to a 10% baseline on all imports by the Trump administration, have also led to a 25% increase on auto imports.
This has sent shockwaves through the global auto industry, as companies like Stellantis struggle to maintain margins.
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By GlobalDataIn a letter to employees, Stellantis outlined “continuing to assess the medium- and long-term effects of these tariffs on our operations, but also have decided to take some immediate actions.”
Romaine McKinney III, president of the local union chapter that represents workers at Stellantis’ stamping plant in Warren, Michigan, expressed his concern over the tariff-related layoffs, stating “It’s pure devastation”.
The layoffs have also impacted the company’s stock, with Stellantis shares closing 9.3% lower in New York on 3 April.
A similar decline was observed in other automotive giants such as General Motors, Ford, and Tesla.
The five facilities affected by the layoffs are Stellantis’ Warren Stamping, Sterling Stamping plants, Indiana Transmission plant, Kokomo Transmission plant, and Kokomo Casting plant.
This move contradicts Trump’s long-term promise to bring jobs back to the US, as it has resulted in immediate job losses.
In addition to the layoffs, Stellantis initiated a voluntary buyout programme last month for select US factory workers.
This programme is being offered at facilities in Detroit, Ohio, and Illinois as the automaker seeks to reduce expenses in anticipation of challenges in 2024.
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