Fiat Chrysler Automobiles said it’s eliminating a shift of workers and indefinitely laying off 1,300 employees at a Michigan factory that produces the Chrysler 200 mid-size sedan, U.S. sales of which have plunged 63 percent this year.
The furloughs at the Sterling Heights plant begin July 5 “to better align production with demand,” Fiat Chrysler said in a statement Wednesday. “The company will place indefinitely laid-off employees in open full-time positions as they become available within the Detroit labor market based on seniority.”
Chief Executive Officer Sergio Marchionne said in January that he was moving away from building cars in the U.S. as auto buyers shift to more sport utility vehicles and pickups. Fiat Chrysler has resorted to offering zero percent financing on 84-month loans for the 200 and the Dodge Dart, a slow-selling small car in the company’s lineup.
Norwood Jewell, a United Auto Workers vice president, said the Sterling Heights shift reduction is unfortunate but not unexpected, because of the sales decline.
“The company has been planning to increase its capacity to build more trucks and SUVs,” he said. “I believe that in the long term this move will be a positive one for our members and the company.”
Ford said Tuesday it will build a $1.6 billion small-car factory in Mexico to improve the profitability of slow-selling, fuel-efficient cars. Ford is moving production of its Focus and C-Max small cars out of a plant in Wayne, Michigan.