Stellantis laying off 2,450 plant workers due to discontinuation of Ram ‘Classic’ pickup truck

 

Automaker Stellantis

The truck has been largely used as a low-cost pickup to sell to entry-level buyers and fleet customers since the automaker introduced a new generation of the Ram 1500 in 2018. It is produced alongside the Jeep Wagoneer and Grand Wagoneer at the Warren Truck Assembly Plant near Detroit.

The current Ram 1500, recently updated for the 2025 model year, is produced at a nearby plant. Operations at that facility will continue as planned.

“With the introduction of the new Ram 1500, production of the Ram 1500 Classic at the Warren [Michigan] Truck Assembly Plant will come to an end later this year,” the company said in an emailed statement.

The discontinuation of the Ram 1500 “Classic” vehicle is not unexpected, but the company has not announced a vehicle to replace the truck. That concerns local governments, workers, and the United Auto Workers union, which represents the plant.

A spokesman for the union did not immediately respond to CNBC’s request for comment.

Ram CEO Chris Feuell told CNBC last week that the “Classic” version of the pickup would be phased out by the end of this year.

The layoffs are expected to start as soon as October. The final number of indefinite layoffs at the Warren plant, which currently employs about 3,700 hourly workers, may be lower than the announced numbers. Some employees may be given other jobs or positions at other plants.

The layoffs are the latest for Stellantis, which has cut production at several plants amid sales issues and cost-cutting measures.

Stellantis CEO Carlos Tavares has been on a cost-cutting mission since the company was formed through a merger between Fiat Chrysler and France’s PSA Groupe in January 2021. It’s part of his “Dare Forward 2030” plan to increase profits and double revenue to 300 billion euros (US$325 billion) by 2030.

The automaker last week offered a broad voluntary buyout to U.S. salaried workers to reduce headcount and costs. Stellantis, which reported disappointing first-half results last month, said that if not enough employees participate in the buyout, involuntary terminations could follow. 

A startup working on bringing air taxis to cities in the U.S. is getting another round of major funding commitments from Stellantis, the European company behind brands like Jeep and Maserati.

Archer Aviation on Thursday said Stellantis had agreed to fund up to $370 million of the necessary labor costs needed to support its planned manufacturing ramp-up in Covington, Georgia. The funding will give Archer the necessary cash it needs to boost production of its flagship Midnight aircraft to 650 units each year.

Archer says the Midnight is the largest electric vertical takeoff and landing (eVTOL) aircraft that has taken off from the ground vertically, like a helicopter. The firm on Thursday revealed plans for a network of air taxis that would provide travel across Los Angeles County in California. It would include stops at Los Angeles International Airport and Long Beach, among other locations. Archer is also working with the Los Angeles Rams and the district near Inglewood’s SoFI Stadium on an exclusive vertiport.

The company had cash and cash equivalents of $360.4 million at the end of June. Since then, Archer has received an additional $230 million of equity capital from firms like Stellantis and United Airlines.

Stellantis is Archer’s largest shareholder and will receive more shares on a rolling quarterly basis based on the total labor costs it takes each quarter, as well as the firm’s future stock price. Archer plans to issue Stellantis $30 million of performance warrants that will vest based on the performance of their manufacturing deal.

“Together, our teams have been hard at work constructing our high volume manufacturing facility, which we anticipate completing by the end of this year,” Archer CEO Eric Lentell said during an earnings call. “We always envisioned a future where Stellantis would spearhead manufacturing, allowing Archer to focus on designing, engineering, and bringing to market the best aircraft possible.”

Although shares grew Thursday on the partnership with Stellantis, investors’ enthusiasm was soured after Archer reported another quarterly loss. Archer shares are down more than 9% in trading Friday and have fallen by more than 38% year-to-date.

Lentell said in a statement that Archer “is well positioned to meet our goal of commercialization as early as next year.”The company said its order book has grown to almost $6 billion, thanks to a new contract with Future Flight Global to buy up to 116 Archer Midnight aircraft in a contract worth as much as $580 million.

Cisco (CSCO.O), opens a new tab that will cut thousands of jobs in a second round of layoffs this year as the U.S. networking equipment maker shifts focus to higher-growth areas, including cybersecurity and AI, people familiar with the matter said.

The number of people affected could be similar to or slightly higher than the 4,000 employees Cisco laid off in February, and will likely be announced as early as Wednesday with the company's fourth-quarter results, said the sources, who were not authorized to speak publicly.

Reuters exclusively reported the job cut that San Jose, California-based Cisco announced in February before the company announced it.

The company employed around 84,900 people as of July 2023, according to its annual filing. That number does not account for the February layoffs.

Cisco did not immediately respond to a request for comment.

Its shares fell nearly 1% after Reuters first reported the cuts. The stock was down over 9% this year as of Thursday's close.

Cisco, the largest maker of routers and switches that direct internet traffic, has been grappling with sluggish demand and supply-chain constraints in its mainstay business.

That has pushed the company to diversify with moves such as its $28-billion buyout of cybersecurity firm Splunk, which it completed in March. The acquisition will reduce its reliance on one-time equipment sales by boosting its subscription business.

The company has been trying to incorporate AI products in its offerings and in May reiterated its target of $1 billion worth of AI product orders in 2025. In June, it launched a $1-billion fund to make investments in AI startups such as Cohere, Mistral AI, and Scale AI. The company said at the time it had made 20 AI-focused acquisitions and investments in the last several years.

The layoffs are the latest in the tech industry, which has been cutting costs this year to offset big investments in AI.

Over 126,000 people have been laid off across 393 tech companies since the start of the year, according to data from tracking website Layoffs.fyi.

Earlier in August, chipmaker Intel (INTC.O), opens new tab cut over 15% of its workforce, or some 17,500 people, as it tried to turn around its money-losing manufacturing business.