Stellantis has announced job cuts at its plants in Detroit and Toledo, oddly blaming California emissions rules though their inventories have grown to immense proportions.
The company said that 2,455 workers (two shifts) may be laid off at the Jeep Grand Cherokee plant in Detroit, while 1,225 more (one shift) may be laid off from the Toledo plant which makes the Wrangler and Gladiator. The changes will likely take effect in February.
Dodge, Jeep, Ram, and Chrysler all have bloated inventories of cars and trucks. Stellantis’ logic in blaming California is that the state made deals with numerous automakers in 2019 which use their national fleet numbers for emissions; Stellantis division FCA US chose at that time to play politics and challenge California’s authority to have its own emissions rules instead of negotiating. Stellantis belatedly and unsuccessfully tried to join the pact made with other automakers, and is now restricting dealer stock to PHEVs in the 14 states with California rules (for vehicles with PHEV options); while dealers outside those states can only order non-PHEVs for stock. Customers can custom order whatever they want.
Stellantis has been selling Wrangler 4xe and Pacifica plugin hybrids relatively well in California. In recent decades, the company has done poorly in that state.
Since the creation of Stellantis, FCA US has been on a crash diet, so to speak, trying to increase its fuel economy rapidly to avoid buying credits from Tesla, which is a current and future rival in Europe and a near-future rival in North America as well. A fleet of electric cars are due to arrive soon. However, the idea that Jeep Grand Cherokee, Wrangler, and Gladiator sales are stalling due to the engine allocations may be simplistic given that they have been facing increasing competition, and their high prices are not conducive to high sales to their traditional buyers at a time of high interest rates.
Cutting production appears to have been a last-ditch measure, though many dealers appear to be awash in unsold 2023 Jeeps.