Fiat Chrysler Automobiles (FCA) is cutting a shift and laying off 1,300 employees at its Sterling Heights (Michigan) factory that produces the slow-selling Chrysler 200.
A further 120 workers at Sterling Stamping will also be layed off.
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Chrysler said the measure is needed to better align production with demand and the decision follows temporary layoffs due to a lack of orders for Chrysler’s midsize 200 sedan, the plant’s only vehicle. Chrysler 200 sales through the first three months of the year in the US were down by over 60% with fewer than 18,000 cars sold.
CEO Sergio Marchionne has said that FCA will move away from building cars in the US as auto buyers shift to more SUVs and pick-ups.
The layoffs are “a direct result of shifting demand toward trucks and SUVs,” FCA said in a statement. “Our truck and SUV plants are running six days a week about 20 hours a day.”
There was a resigned tone in the response from the UAW. UAW Vice President Norwood Jewell said the announcement by FCA was unfortunate, but not unexpected. “FCA is not the only company experiencing a slow market for small cars,” he said.
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By GlobalData“On a bright note, there is a strong demand for larger-sized vehicles. The company has been planning to increase its capacity to build more trucks and SUVs. I believe that in the long term this move will be a positive one for our members and the company.”
