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Jeep layoffs are planned at two different assembly plants due to California regulations putting 3,500 workers out of a job.
Stellantis, parent company of Jeep, made the announcement on Thursday, December 7 pointing to the California emissions regulations as the reason why.
Jeep lays workers off
The plan is the Toledo, Ohio plant, builds the Jeep Wrangler and Gladiator, and one of the two Jeep Grand Cherokee plants in Detroit, to go from three shifts of workers to two.
This reduction in shifts will make up the bulk of the 3,500 workers being laid off.
On Friday, according to an Autonews.com article, Stellantis said it will eliminate another 1,200 positions in Toledo in early February.
Stellantis said the reason for the layoffs was “in part because of the need to manage sales of the vehicles they produce to comply with California emissions regulations that are measured on a state-by-state basis.”
Back in June, Stellantis said it was no longer sending gasoline versions of the Jeep Wrangler to California Air Resource Board aligned states meaning customers could only buy the plug-in hybrid 4xe version.
The reduction in shifts also means the company can “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.”
What else is going on?
Besides the layoffs there has a lot more drama surrounding Jeep and Stellantis.
First, it moved longtime Jeep Head Jim Morrison to a newly formed Jeep Performance Parts business. He was replaced by the Maserati North American CEO William Peffer.
The timing of this move is interesting with Jeep on pace for its fifth consecutive year of U.S. sales decline.
Also, Jeep announced the Renegade is dead for the U.S. market. As of the third quarter 2023 sales results, the Renegade was down 35% year to date with 15,561 units sold. Besides the Grand Wagoneer, the Renegade has the least amount of sales of any Jeep products.
Finally, Stellantis announced it wants to void a California emissions deal with rival automakers. They said voiding the deal would “relieve Stellantis of the competitive disadvantages arising from our continuing exclusion and to preserve our ability to best serve our customers by fairly allocating our products to all states,” according to AutoNews.com.
The bottom line
A new head of the company, challenges selling their vehicles in certain states and ending production of slow selling vehicles like the Renegade add up to a lot of moves for an automaker. Are they all the right moves? Time will tell.
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