Fiat Chrysler to lay off 1,300 Detroit workers

Apr. 7, 2016 – Tumbling sales of Fiat Chrysler’s main midsize car have driven the company to indefinitely lay off 1,300 employees at a Detroit, Mich.-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 Chrysler 200 has started to stack up on dealer lots.

According to The Associated Press, this is 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 per cent for the first three months of the year.

But the 200 had other problems including poor reviews due to unresponsive handling, a rough-shifting transmission and a four-cylinder base engine that didn’t have enough power.

Even Fiat Chrysler CEO Sergio Marchionne criticized the car at this year’s Detroit auto show, saying it had a bad rear-door design that was copied from Hyundai’s Sonata. Marchionne said later in January that FCA wants to find a partner to build small cars like the Dodge Dart and Chrysler 200 so it can make more hot-selling Jeeps at its U.S. plants. He wouldn’t say which factories would get more Jeeps, but last year’s UAW contract promised new vehicles for the Sterling Heights and Belvidere, Ill., factories.

Fiat Chrysler says the second shift in Sterling Heights, which has been on temporary layoff since February 1, will return to work Monday and be on the job through July 5. But after that, workers will be laid off indefinitely.

— With files from Tom Krisher, The Associated Press