Fiat Chrysler to lay off 1,300 workers

Posted at 3:02 PM, Apr 06, 2016
and last updated 2016-04-06 15:02:32-04

Tumbling sales of Fiat Chrysler's main midsize car have driven the company to indefinitely lay off 1,300 employees at a Detroit-area factory.

Workers on the second shift at Fiat Chrysler's assembly plant in Sterling Heights, Michigan, will be furloughed starting July 5 as the slow-selling Chrysler 200 started to stack up on dealer lots.

Sales of the cars were down 61 percent through March, and inventory grew to a 150-day supply, according to Ward's Automotive. Automakers consider 60 days to be optimal to give dealers enough of a selection for customers. Fiat Chrysler sold only 7,500 of the cars last month, less than half the number it sold a year ago.

It's the company's first indefinite layoff since 2009, when demand for cars and trucks dropped coming out of the Great Recession, and it's caused in part by U.S. buyers shifting from cars to SUVs of all sizes. Midsize cars, which have been particularly hard hit by the shift, saw sales fall 3.5 percent for the first three months of the year.

Fiat Chrysler says the plant's second shift will return to work Monday and be on the job through July 5. But after that, workers will be laid off indefinitely. They have been on temporary layoff since Feb. 1.

The company notified employees represented by the United Auto Workers union of the decision on Wednesday, as well as state and city officials, FCA said in a statement. Fiat Chrysler said it will place the laid-off workers in open full-time positions as they become available in the Detroit area.