Warren — United Auto Workers leaders in Metro Detroit have expressed concern and frustration in recent weeks about more Ram pickup production possibly heading to Mexico.
Stellantis NV, the parent of Ram, Jeep and other brands, on Friday announced plans for up to 2,450 layoffs at the Warren Truck Assembly Plant in early October after production of the Ram 1500 Classic ends and the facility’s general assembly moves to one shift.
UAW officials at Warren say they could maintain a second shift if the plant could accept overflow production of the latest-generation Ram 1500 from nearby Sterling Heights Assembly Plant, or SHAP, once that facility reaches capacity. But that is not certain.
Both the union and analysts say it appears that overflow work will go to a factory in Mexico, a prospect certain to be a flashpoint between the UAW and CEO Carlos Tavares, whose public criticism of the union workforce is intensifying. A Stellantis spokesperson said last week a decision on overflow production hasn’t been announced.
“We’re truck builders. That’s what we do there,” said Warren Truck’s UAW Local 140 President Eric Graham prior to the layoff announcement. “So for them now to tell us that we’re not even good enough to build your overflow? It’s a slap in the face for a lot of employees.”
SHAP’s union leaders have their own longer-term worries about Ram 1500 production shifting to Mexico, potentially after the current UAW contract expires in 2028. Those concerns were heightened after Tavares late last month mentioned problems with the plant’s “direct run rate,” or how many trucks need repairs after final assembly.
Michael Spencer, president of Local 1700, which represents SHAP workers, interpreted the comments as the company trying to build a public narrative — “a form of sabotage,” he said — that the plant isn’t up to the task of building the new Ram 1500. The plant builds the 2025 gas-powered truck and is also slated to produce the electric and extended-range EV versions under the UAW’s contract with the company.
The Saltillo Truck Assembly Plant is the Mexico facility that has long built some Ram trucks, including currently heavy-duty and commercial versions like the 2500, 3500, 4500 and 5500.
Stellantis isn’t alone in operating some full-size truck manufacturing outside the United States. General Motors Co. builds trucks in the United States, Mexico and Canada. Ford Motor Co. makes them in Dearborn, Kentucky and Ohio, though after last fall’s UAW strike, CEO Jim Farley suggested the company would have to “think carefully about our (manufacturing) footprint.” Last month, the company said its Oakville Assembly Plant in Canada would build some of its F-Series Super Duty trucks starting in 2026.
‘Down the street from SHAP’
Warren Truck will keep building the Jeep Wagoneer and Grand Wagoneer SUVs into at least 2028, according to the UAW contract. But the contract doesn’t mention any new vehicles coming to the plant in the next few years.
Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions LLC, said there is one vehicle that might be a strong possibility for the plant: the Ram 1500 Ramcharger, which will be battery-powered but include an onboard gas engine for recharging.
The Ramcharger will share many components with a similar so-called EREV version of the Wagoneer and Grand Wagoneer that’s expected to launch at Warren Truck next year, he said. So it might make sense to build them together, “but we haven’t seen any plans of that yet.”
Yet there had been real hope that Warren Truck might be able to get the gas-powered Ram pickup overflow work, according to Graham as well as recent letters sent by other union leaders. It made sense because the facility has built the Classic pickup and various other versions of Ram and Dodge trucks for decades.
Graham said the company had raised concerns about costs, production efficiency, quality and employee attendance at Warren Truck early this year. But three out of four of those issues have been resolved, he said, with attendance still being an issue in recent months. The attendance problem could be solved as well, he said, with some help from the company on child care and scheduling.
“We’re right down the street from SHAP,” Graham said, referencing the two plants being about a 15-minute drive apart on Mound Road. “And I just don’t understand why we’re not getting it (the overflow), and no one can understand it.”
He added: “I haven’t been in the boardrooms in Stellantis … I don’t know what they talk about. But the one thing I do know is that it’s a lot cheaper to build a vehicle in Mexico. You’re paying the workers less.”
UAW President Shawn Fain mentioned in a recent letter to Stellantis members that the “overflow is not going to Warren Truck” but pledged to keep fighting to maintain Ram production in the United States. UAW officials have acknowledged it was always possible that the overflow work could go to Mexico, thanks to the contract’s language.
A so-called “dual-source” letter included in the agreement opened the door for some Ram production to occur elsewhere in North America, though it did guarantee SHAP work through the end of the contract.
“The Company has been clear that while Sterling Heights Assembly will produce ICE, BEV, and REPB Ram 1500s, it may be necessary to establish a dual source within North America” to produce the gas-powered truck after the electric truck launches later this year, in order to “meet market demand,” the dual-source letter states. It adds that production volumes at SHAP can’t be scaled back unless the secondary overflow location is stopped first.
Marick Masters, a professor emeritus of business at Wayne State University and a UAW expert, said it’s likely there is still some bargaining that can occur between the union and company about the Ram overflow location. But overall, he said it’s not surprising that Stellantis is aiming to put more production in lower-cost Mexico as it seeks to save money amid the EV transition.
Fain slammed the layoff announcement on Friday. In a statement, he said that taxpayers, workers and consumers have invested in Stellantis, and “it’s time for Stellantis to invest in us.” He alleged Tavares had been mismanaging the company and not showing commitment to the American autoworker.
“We continue to look at options for Warren Truck,” Jodi Tinson, a Stellantis spokesperson, said in a Tuesday email.
Graham said meetings with company management, as well as his members, are scheduled for later this week.
SHAP quality issues
Tavares told reporters last month that some U.S. plants, including SHAP, have a direct run rate that is too low. That means too many trucks have needed repairs after the fact, which increases costs, delays vehicle shipments, and can lead to other quality problems, said the CEO, who is expected to visit the plant this month.
“When you are making a repair outside of the main line, you can always fix what you have to fix but create another problem,” Tavares said.
Between the run-rate issue and other U.S. plant headaches involving suppliers that led to plant shutdowns — as well as product mix problems where production of certain trims and models wasn’t aligned with demand — Tavares said it’s been a “painful” time for his American manufacturing operations.
“SHAP is the primary location for production of the Ram 1500, and we continue to work with the union and our workforce to improve production there,” Tinson said.
Spencer, the local union leader, acknowledged the plant has faced challenges since it launched the 2025 Ram 1500 early this year. A common issue has been with the truck’s electrical systems, he said, including wire harnesses and modules. At one point there were a “significant amount” — several thousand — of pickups waiting to be repaired, he said.
But Spencer, who has worked at the plant for 24 years, said the blame has wrongly been placed on the plant itself and the workers.
“It all relates back to issues with engineering and suppliers,” he said, adding his belief that Tavares is aiming to build a case to send more Ram production to Mexico once the current contract ends. Spencer and other union officials have recently been laying out their SHAP concerns — from the electrical component issues to Mexico production worries — on a podcast that’s meant for members but has garnered attention elsewhere, too.
“They do have the Mexico plant — we do know they have cheaper wages, we do know their safety regulations are a little more lax,” Spencer said.
The union leader said he wants to work with the CEO to resolve the problems and secure the vehicle long-term at the plant. But he said there is nothing fundamentally wrong with a workforce that has built a pickup which has won multiple MotorTrend Truck of the Year awards.
@lramseth
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Publish date : 2024-08-13 16:01:00
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