Cars and Drivers

New Car Industry Layoffs: A Warning to Ford and GM

Douglas A. McIntyre

Published: August 10, 2024 7:23 am

Last Updated: August 12, 2024 7:27 am

24/7 Wall St. Insights

• Automaker Stellantis N.V. (NYSE: STLA) will lay off almost 2,500 workers in the United States.
• Ford and General Motors should take warning.
• Also: Dividend legends to hold forever.

The huge multinational car company Stellantis N.V. (NYSE: STLA), which owns Chrysler, Ram, Jeep, and Dodge, will lay off 2,450 of its workers in the United States because it will stop making the older generation of the Ram 1500 pickup. The latest version of the vehicle will remain in production.

The corporation’s PR department described the reason for the layoffs as: “We introduced the new 2025 Ram 1500 Tradesman with incredible value and content. The upgraded electrical architecture allows new technologies useful to commercial fleets for better tracking and improved safety systems.” The industry faces ongoing problems as it tries to find a new direction in a market where EVs are supposed to be the future but are not selling well. In the meantime, the industry’s large companies must decide which gasoline-powered models they will keep in production to make money today.

Stellantis is also reworking other parts of its lineup. The company’s Dodge division will stop making the gasoline-powered versions of its iconic Challenger and Charger. Each has massive gas-guzzling engines that, in theory, versions with electric engines could replace.

As big car companies evaluate their brands, some have cut back on EVs, which are supposed to be the industry’s future. Ford Motor Co. (NYSE: F) said it would increase the production of its big Super Duty pickups. In 2022, Ford said it would use production capacity to produce as many as 150,000 of its EV Ford F-150 Lightning. That has not happened. Ford is already a financial disaster.

General Motors Co. (NYSE: GM) recently walked back plans for EV production. CEO Mary Barra stepped away from plans to be able to build one million EVs a year.

The U.S. car sector is confused. Recent decisions by GM and Ford show that. Stellantis is discontinuing a pickup line. Pickups have been the backbone of U.S. vehicle sales.