Some 1,300 workers who built the midsize sedan Chrysler 200 will soon lose their jobs. In an announcement on April 6, Fiat Chrysler Automobiles NV is set to implement its first mass job cut since the 2009 crisis amid the steep decline in demand for the small car category.
A full shift of workers will be affected at the Sterling Heights, Michigan sedan assembly plant. The lost jobs represent 41 percent of the assembly's head count. The layoff will take effect on July 5.
U.S. sales for the Chrysler 200 were on a steep plunge during the first three months of this year, dipping to 63 percent. Low gas prices are fueling American car buyer preference for truck models such as SUVs, pickups and crossovers.
Work at the Fiat Chrysler Sterling Heights plant was at a standstill for 10 weeks, but it is set to resume operation on a staggered shift. FCA Chief Executive Sergio Marchionne said that the company has plans to stop the manufacture of the Chrysler 200 and the compact Dodge Dart, but could not confirm when this would happen.
In a move to shift focus on trucks and SUVs, Marchione earmarked $1 billion to restructure the plant setup to accommodate the requirements of a truck plant. Details of the model were not available.
The United Auto Workers group was not surprised. Its vice president, Norwood Jewell, expressed confidence that FCA will help the workers find jobs in available openings in other assembly plants. He added that with the company's new thrust, he had high hopes the laid off workers will be considered.
While weakness in the small car category is a temporary setback, Fiat Chrysler has reported consistent gains for the last six years, adding about 11,000 jobs in the Detroit area during the period. Thanks to its sales strength in the Ram truck and Jeep SUV categories, it is expected to outstrip Toyota Motor Corp. as the No. 3 car seller in the U.S.
According to information, five months' worth of unsold Chrysler 200 and three months of Dodge Dart are idly sitting in warehouses. The company is now offering easy deals on the units such as zero percent financing for 84-month loans, aside from cash rebates.