Stellantis, GM slash head count in Michigan but keep state incentives

Chrysler parent Stellantis and General Motors are slashing head count in Michigan even as state officials hand out hefty incentives intended to grow and retain automotive jobs.

GM’s announcement this week of 1,000 white-collar layoffs, including 634 at its Global Technical Center near Detroit in Warren, comes on the heels of Stellantis saying it will cut up to 2,450 jobs at its Warren Truck Assembly plant.

Those are just the automakers’ latest actions to shrink their workforces in Michigan. At the start of the year, Stellantis employed 38,913 people in the state, a 7 percent year-over-year drop, according to data submitted to Crain’s. GM’s Michigan head count of 50,316 at the start of 2024 represents a 9 percent decline from 2023.

The recently announced reductions are not the first wave of job cuts in Michigan this year for either automaker.

GM previously said it would cut 1,314 jobs in Orion Township and Lansing starting in January, while Stellantis previously announced up to 2,450 workers would be laid off at Mack Assembly in Detroit starting in February. The company later said the number of workers impacted was lower but declined to provide a figure. Stellantis has also cut local engineers and tech employees and it offered a voluntary separation program across divisions for its U.S. salaried workforce.

The eliminations reflect the challenges of each automaker. Stellantis, which makes Chrysler, Ram, Jeep and Dodge products, has seen large sales declines in the U.S., prompting it to dial back production as it undergoes aggressive cost-cutting. GM, which has faltered in its electrification strategy and is grappling with software problems on its new pickups, pinned the latest job losses to an attempt to streamline software operations.

Ford Motor Co. certainly is not without challenges, announcing Wednesday that it will dramatically rework its EV plans in a $1.9 billion shift, scrapping plans for a three-row SUV and delaying production of its next-generation electric pickup. The automaker is unique among the Detroit 3 in that its Michigan head count increased 11 percent year over year to 50,000, the company told Crain’s in July. Ford did not pinpoint a reason for the growth.

In general, there is massive uncertainty hanging over the automotive industry and the traditional domestic automakers in particular, said Marick Masters, a business professor specializing in labor at Wayne State University in Detroit. That uncertainty is augmented in Michigan, whose economic engine is tied to the Detroit 3.

“Auto companies are in a period of massive technological change in the industry due to electrification and autonomous vehicles,” Masters said. “These disruptive changes are occurring at a time when the economic markets are uneven.”

Mass layoffs are common in the automotive industry, known for its cyclical nature. But the Detroit automakers, fresh into a UAW contract with record labor costs, are racing to develop affordable EVs as overall new-vehicle demand wanes. That could signal more downsizing, Masters said.

GM and Stellantis offered statements in July affirming their commitments to Michigan.

“Stellantis has made its home in Michigan for more than 100 years. With manufacturing facilities, parts distribution centers and proving grounds located across the state as well as the Auburn Hills complex, Michigan continues to play a critical role in the company’s global operations,” spokeswoman Jodi Tinson said in an email to Crain’s.

GM pointed to its status as one of the state’s top employers as well as its recent announcement of a new headquarters in the Hudson’s Detroit development in downtown Detroit.

“… We continue to invest across the state,” GM spokesman Kevin Kelly said in an email. “We have 38 facilities in Michigan, including our Global Technical Center (in Warren), Milford Proving Grounds and our headquarters in the city of Detroit.”

As for its head count increase, Ford indicated that change is par for the course when it comes to a seismic shift in the industry.

“Numbers in individual functions can go up and down over time for a variety of reasons, particularly in a period where we’re remaking Ford amid a technology-led double transformation of our industry,” spokesman Ian Thibodeau said in an email.

The recent job cuts by Stellantis and GM are not likely to impact incentives, which Michigan tends to award more generously than competing states. Economic development officials say deals are dictated by job creation metrics, but rarely do automaker layoffs or downsizing result in any clawing back of funds.

In 2019, FCA (now Stellantis) announced its plan to invest $4.5 billion in Michigan, including a $1.5 billion retooling of Warren Truck and $1.6 billion to overhaul Mack Assembly. The project was approved for some $400 million worth of incentives by the Michigan Economic Development Corp.

At Warren Truck — the site of the most recent planned job cuts — the SESA tax exemption hinged not on jobs but on an investment threshold, which the company met, MEDC spokesman Otie McKinley said. Crain’s also inquired about the Mack Assembly layoffs and potential impact incentives.

Stellantis declined to comment on incentives.

The automaker, whose North American base is in the Detroit suburb of Auburn Hills, is likely to seek more state support at Sterling Heights Assembly Plant, its most profitable factory, which is undergoing retooling for the Ram 1500 REV. The UAW secured a promise to produce the electric pickup in the U.S. in its most recent labor deal with Stellantis, though the company has yet to confirm those plans.

As for GM, the state awarded the company $824 million of incentives in 2022 to bring $7 billion of investment that has yet to pay off.

At the time of incentives being approved, GM pledged to invest $4 billion in Orion Assembly, create 2,300 jobs and retain another 1,000, according to terms of the deal. Since then, GM laid off nearly 1,000 workers at the plant and has pushed back production twice. Mid-2026 is now the launch target for electric pickups at the factory.

GM’s Ultium battery plant in Lansing, a joint venture with LG Energy Solution, was expected to employ 1,700 workers after a $2.6 billion investment. However, construction of that plant has slowed amid slower-than-expected EV sales growth.

Kelly, the GM spokesman, said the announced job cuts do not impact its incentive deals.

State officials are watching the automakers and trends closely, and much like executives at a nimble auto supplier, they are in search of ways to diversify and reduce dependence on the fickle automotive industry.

“While manufacturing and specifically advanced manufacturing are a priority for us, we also recognize that we need to continue to look to other industries as well,” Josh Hundt, executive vice president and chief projects officer at the MEDC, told Crain’s in a July interview.

Hundt said Michigan has done a good job holding on to its share of auto and manufacturing jobs even as the overall number of those jobs in the U.S. has declined substantially.

Still, states to the south have been a magnet for new auto investment in recent years for a host of reasons including labor costs and lack of union influence, development-ready land and other pro-business policies.

How Michigan fares through the latest industry cycle — and in the longer-term industry transformation — remains to be seen.

“We need to continue to work hard to retain what we have here in the state while also being opportunistic about growth opportunities within the automotive industry and also seeing opportunities from other industries and other companies as well,” Hundt said.