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A Major US Automaker Is Rumored To Be Doing a 50% Layoff

Austin Smith

Published: September 30, 2024 9:11 am

Last Updated: October 28, 2024 9:36 am

Key Points:

• Stellantis may lay off 50% of its North American workforce and outsource jobs due to struggles in the U.S. market.
• Jeep faces increasing competition from brands like Hyundai and Kia, threatening its market position.
• Stellantis’ issues could signal broader challenges for other U.S. automakers like GM and Ford.
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Lee and Doug discuss the challenges facing Stellantis, the company that now owns Chrysler, Jeep, and Ram, and the potential impact on the American car industry. They talk about Stellantis’ possible plan to lay off up to 50% of its North American workforce, outsourcing jobs to India and Mexico, which could have significant implications for American labor and the car industry. The conversation also touches on the increased competition Jeep is facing from other brands like Hyundai, Kia, and Ford (NYSE: F), which could further strain Stellantis’ market position. The discussion concludes with concerns that if Stellantis struggles, other major U.S. car manufacturers like GM (NYSE: GM) and Ford might also face difficulties.

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Edited Video Transcript:

[00:00:00] Douglas A. McIntyre: A lot of people don’t know this, but Chrysler has been owned by a whole bunch of people. It was owned by Mercedes Daimler for a while. It’s now owned, Chrysler is now owned by a company called Stellantis, which is. Based in Italy and, you know, owns a bunch of brands and, you know, it’s one of these multi brand companies in a lot of ways like General Motors or Volkswagen is what they found though, is, is that owning Chrysler in the United States turned out to be a pretty crummy deal they’re now down to.

[00:00:36] Douglas A. McIntyre: from having a very wide array of models, they’re basically a minivan company. So I want you to explain to me how does this work out well in the end for Stellantis?

[00:00:46] Lee Jackson: Well, it’s going to be an interesting story because, well, Stellantis has the Ram truck, which is a probably a strong number two seller. They have the Jeep line, which has you know, cult like buyers that always want to own it.

[00:01:02] Lee Jackson: And okay. So that’s another product and yeah. And vans, you know, they had a big sedan, you know, the 300 or 200 or 300, whatever the model number was a couple of years ago, that, that did well for a couple of years. And the problem that I have. Got a firsthand indoctrination of when I was in Detroit recently is, uh, they laid off a people, a bunch of people last year and earlier this year, rather, and it was a huge layoff and it did not go over well in the industry.

[00:01:32] Lee Jackson: So they started to offer, you know, packages for people to get out. And one of the people that accepted that package was my daughter in law’s brother. And he got a nice package, you know, got a good termination. And it was just recently from the Chrysler tech center because he was a auto mechanical engineer and he ended up going, he’s.

[00:01:52] Lee Jackson: Coming to Savannah, Georgia to work for Hyundai at a much better job. Now, the interesting thing is my brother, uh, up in Detroit has worked for Chrysler for years off and on, and also worked at Roush for years. And so when I, I was asking him about this in the payout and, and, and the, the plan to go, he told me that if there isn’t a huge.

[00:02:14] Lee Jackson: amount of people that take this buyout because, you know, it’s not technically being fired or laid off. But if there’s not huge participation, he said, and this is something I found stunning. So I literally asked him again and I checked his email and it texts to me. He said that it’s very possible that Stellantis wants to lay us 50 percent of the North American workforce and they want to outsource it.

[00:02:41] Lee Jackson: And, uh, the, uh, my daughter in law’s brother said they want to outsource his kind of job to, to India, you know, the, the engineering and the, uh, automobile engineering, and they want to outsource production to Mexico, which will never be allowed if Trump is reelected because the, the tariffs will be huge. So.

[00:03:02] Lee Jackson: The mere fact that a major car company is considering a 50 percent layoff after just signing a huge UAW deal, which they’re being accused of not with upholding their end of the bargain, that would be one of the biggest stories in the history of American labor.

[00:03:22] Douglas A. McIntyre: It also tells you something about Uh, what’s happening in the American car industry.

[00:03:28] Douglas A. McIntyre: Jeep was an iconic brand. It was Chrysler, but Jeep has been fairly successful up until recently. The number of companies that now manufacture as you, you know, Jeep light cars, it used to be that that was a moderate number of, uh, companies. Now, even the two South Korean. Uh, Hyundai and Kia have products that compete directly with Jeeps.

[00:04:01] Douglas A. McIntyre: And they are, they are not products that were available in the United States until fairly recently. So Jeep is starting to get squeezed.

[00:04:10] Lee Jackson: Yeah, and there, you know, there’s a new Hummer, you know, that kind of has odd looking wheels that can turn in odd directions and, you know, worm you in and out of parking spaces.

[00:04:20] Lee Jackson: And I think Ford makes one of the new Broncos as sort of a, you know, you know. All terrain type vehicles. So yeah, there is, there is, uh, definitely a competition and, but again, if Stellantis attempts to lay off 50 percent of the American workforce, it will be, you will never hear the end of this. I mean, it, it could clearly steer him to bankruptcy

[00:04:45] Douglas A. McIntyre: clearly.

[00:04:47] Douglas A. McIntyre: And one of the reasons to keep an eye on this is that. You know, the brands we’re talking about, Ram, Jeep, Chrysler, they’re still us brands. And if they’re struggling, that means that there are parts of likely GM and Ford that are struggling. These, these, these car companies don’t have big problems in vacuums.

[00:05:13] Douglas A. McIntyre: You don’t have one of them that falls apart and everybody else does well. Also. This may end up being, you know, a story that eventually involves Ford and General Motors. So let’s keep an eye on it because these are all global car companies. None of the car companies we’re talking about right now is local.