In November 2024, Stellantis laid off 1,100 workers at its Jeep plant in Toledo, Ohio, and 400 more at a Detroit parts warehouse. This is just the beginning—Mobis North America, a key supplier, announced 210 layoffs due to lost orders. The ripple effect is massive, and it’s a dire sign for the broader economy.
Stellantis is struggling with high inventory levels and competition from Chinese carmakers. The company’s third-quarter sales plummeted 20%, leading to a profit warning and a decision to cut costs by slashing jobs. These layoffs aim to adjust U.S. operations, with the Toledo plant moving to one shift starting January 2025.
As Stellantis slashes jobs, consumers are also suffering. Edmunds reports a worrying rise in auto loan terms. The share of consumers taking out 84-month auto loans has surged from 15.8% in Q1 to 18.1% by Q3 2024. This suggests people are stretching out payments they can’t afford, trying to lower monthly costs but creating more financial strain in the process.
Meanwhile, Ally Financial (ALLY) faces mounting pressure. The growing trend of negative equity, longer loan terms, and $1,000+ monthly payments are making it harder for consumers to keep up with car loans. 17.4% of new-vehicle shoppers in Q3 2024 took on $1,000+ monthly payments, marking the 6th consecutive quarter of this troubling trend.
1,100: Stellantis layoffs at the Toledo plant
400: Stellantis layoffs at the Detroit warehouse
18.1%: Consumers opting for 84-month loans in Q3 2024 (up from 15.8% in Q1)
17.4%: Shoppers taking on $1,000+ auto loan payments in Q3 2024
This is just the beginning. As Stellantis and its suppliers make cuts, the financial strain on consumers continues to grow, with car loan debt hitting unsustainable levels. The situation is precarious for both the auto industry and the broader economy.
1. Wednesday: $STLA indefinitely laid off more than 1,100 workers at Jeep plant in Ohio.
Friday: $STLA cuts 400 plus jobs at Detroit parts warehouse.
— Unicus (@UnicusResearch) November 9, 2024
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