Fiat Chrysler's Sterling Heights Assembly Plant is laying off 1,300 workers due to sluggish 200 sales.
Fiat Chrysler is laying off nearly 1,300 workers at a Metro Detroit plant as a result of the sluggish sales of the automaker’s Chrysler 200 midsize sedan.
The layoffs, or furloughs as FCA is calling them, begin July 5 and while timed to coincide with the “shut down season” for makers, these layoffs are indefinite and impact the plant’s second shift.
The move is the first time since 2009 that the automaker has idled workers with no return date. That time the entire industry was in the throes of a horrific sales slump that saw figures drop to lows not seen in decades.
Despite the torrid pace of sales this year, low gas prices have buyers opting for trucks and SUVs rather than smaller cars. The 200 has been hit particularly hard as sales are down more than 60% on a year-over-year basis.
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Additionally, it hasn’t been the hit that officials hoped for when it debuted two years ago. After some initial positive reviews for its exterior styling, quality issues and design flaws have come to light hampering sales.
“While today’s announcement of a shift reduction at Sterling Heights Assembly is unfortunate, it is not unexpected,” said UAW Vice President Norwood Jewell in a statement. “FCA is not the only company experiencing a slow market for small cars.”
The union was supportive without endorsing the maneuver.
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“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.”
The plant, which is located in Sterling Heights, Michigan, will begin taking on production of the company’s hot-selling Dodge Ram 1500 pickup truck. It has undergone extensive expansion and retooling to be able to handle the new product, but it’s not expected to see any of that work for more than a year.
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Currently, the full-size truck is produced at the nearby Warren Truck Plant, but it will be getting new product there as well: the Jeep Grand Wagoneer. However, that’s not expected for some time either.