Stellantis has notified thousands of workers in the U.S. states of Ohio and Michigan of potential layoffs, attributing the move partly to California rules that limit where vehicles can be sold.
The European automaker on Thursday notified 2,455 workers in Detroit and 1,225 in Ohio of potential job loss under the federal Warn Act, which requires early notification of major layoffs.
The company expects the actual number of layoffs to be "much lower" than the Detroit figure and "slightly lower" than the Ohio number, said Stellantis spokeswoman Jodi Tinson.
"Due to the complexity of our bargaining agreement related to the placement of affected employees, Warn notices were issued to more employees than will ultimately be impacted out of an abundance of caution to give employees notice even if not legally required," Tinson told AFP in an email.
The notification hits the Midwestern states only weeks after workers at Stellantis and fellow Detroit giants General Motors and Ford ratified sweeping new wage increases following a roughly six-week strike organized by the United Auto Workers union.
The job cuts affect Stellantis' Mack assembly plant in Detroit, where the Grand Cherokee and hybrid Grand Cherokee 4xe are assembled; and the Toledo Assembly plants where the Jeep Wrangler and hybrid Jeep 4xe are put together.
The moves at the plants are to "manage sales of the vehicles they produce to comply with California emissions regulations that are measured on a state-by-state basis," said a Stellantis statement.
On Wednesday, Stellantis filed a formal challenge with the California Office Administrative Law of state air board policies that it argues unfairly disadvantage the European company.
Stellantis is currently sending only the hybrid versions of its vehicles to dealer lots in California and 13 other states that follow the mandates set down by the California Air Resources Board (CARB).
This has meant that in certain periods, Stellantis has only sold internal combustion engine vehicles in California in response to customer orders, Stellantis attorneys said in the December 6 letter to the administrative board.
Conversely, the company has at times limited hybrid models to customer orders, meaning "dealers could not place certain vehicles on their lots for customers to view and test drive," Stellantis said in the letter.
In July 2019, California announced an agreement with four Stellantis rivals -- Ford, Honda, Volkswagen and BMW -- in response to then President Donald Trump's effort to freeze emissions rules.
CARB's "continuing exclusion" of Stellantis subjects the company to a "double standard," which also threatens "the livelihoods of our 56,000 US employees," the company said.
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