Stellantis and GM slash jobs in Michigan amid economic incentives to boost auto industry

Stellantis and General Motors (GM) are slashing thousands of jobs in Michigan despite significant incentives from state officials to retain and grow automotive employment. GM announced this week that it will lay off 1,000 white-collar workers, including 634, at its Global Technical Center in Warren. This follows Stellantis’s decision to cut up to 2,450 jobs at its Warren Truck Assembly plant.

These layoffs are the latest in a series of workforce reductions by both automakers in Michigan. Stellantis’s headcount in the state dropped by 7% over the past year to 38,913 employees, while GM’s workforce has decreased by 9%, now standing at 50,316.

The job cuts reflect ongoing challenges in the automotive industry, including Stellantis’s declining U.S. sales and GM’s struggles with its electrification strategy and software issues in its new pickups. These reductions are part of broader efforts by the companies to streamline operations and reduce costs.

Ford also faces industry challenges but stands out among the Detroit automakers with an 11% increase in its Michigan workforce over the past year. However, Ford recently announced a $1.9 billion shift in its EV strategy, including canceling plans for a three-row SUV and delayed production of its next-generation electric pickup.

Mass layoffs are common in the cyclical automotive industry, but the Detroit automakers are under increasing pressure as they navigate record labor costs and the push to develop affordable electric vehicles (EVs) amid weakening demand.

Despite the job cuts, both Stellantis and GM have reaffirmed their commitment to Michigan. Stellantis emphasized its long-standing presence in the state and its ongoing investments in manufacturing facilities. GM pointed to its status as one of Michigan’s top employers and its recent investment in a new headquarters in downtown Detroit.

The recent job cuts are unlikely to impact the incentives awarded by Michigan, as these deals are typically tied to job creation metrics. Economic development officials have noted that automaker layoffs rarely result in the clawback of funds. Stellantis and GM are expected to seek further state support for future projects, even as the auto industry undergoes significant transformation.

Michigan officials closely monitor the situation and explore ways to diversify the state’s economy beyond its heavy reliance on the automotive industry. While manufacturing remains a priority, there is a growing recognition of the need to attract and develop other sectors to ensure long-term economic stability.