Daily Management Review

1,300 Jobs and Shifts to be cut at Fiat Chrysler Factory in Michigan


1,300 Jobs and Shifts to be cut at Fiat Chrysler Factory in Michigan
More than 1,300 workers at the Sterling Heights, Michigan plant that makes the slow-selling midsize Chrysler 200 sedan is being laid off for an indefinite period by Fiat Chrysler Automobiles. The company also announced that it would end one of the two shifts at the unit.
As FCA has de-emphasized sales of the model which had been often sold to rental agencies, the U.S. sales of the Chrysler 200 were down 63 percent in the first three months of this year from a year earlier.
The lay-offs will become effective from July 5.
There was no word from the company about how long it would the production of Chrysler 200 continue. Unless a partner could be found to keep the production going, the company would cease making the midsize sedan as well as the compact Dodge Dart, Fiat Chrysler Automobiles Chief Executive Sergio Marchionne had said in January.
 While expressing optimism that FCA will find jobs for the workers by making more trucks and SUVs, United Auto Workers Vice President Norwood Jewell said in a statement that the move was not unexpected.
"FCA is not the only company experiencing a slow market for small cars. 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," Jewell said.
This lay off by Fiat Chrysler is among the largest retrenchments that have taken place in the US auto sector and a US auto plant ever since the 2008-2009 recessions. Experts and analysts say that the U.S. automakers are trying to adjust to consumer tastes that continue to shift from cars such as sedans and hatchbacks to SUVs and pickup trucks. This is the reason that they believe that this would not be the end of production changes among U.S. automakers.
The company said that after a 10-week shutdown called to match consumer demand with production, workers at the Sterling Heights plant in suburban Detroit will return to work this coming Monday.
44 percent of the total auto sale in the US is accounted for by passenger cars in 2015 which was down from 48 percent in 2014. According to industry consultant Autodata Corp, in 2015, cars outsold SUVs and trucks in the U.S. market. In 2012 the figure was the highest when 51 percent of new vehicles sold were cars.
Using tools like cutting jobs and production for some models while adding to those of others, US car companies like General Motors Co and Ford Motor Co in the past year have adjusted to the shift in the U.S. auto market.