Fiat Chrysler Automobiles said Wednesday it would lay off about 1,300 workers at its Sterling Heights plant in Michigan and scrap one of the two shifts at the plant, which makes the mid-size sedan Chrysler 200, according to media reports. The layoffs will take effect from July 5.
The automaker said it would roll back production on the sedan, popular with car-rental agencies in the United States, from July 5. Fiat Chrysler reportedly said it would place the fired employees in available full-time positions at other plants as they become available.
The layoffs are one of the largest U.S. job cuts by the automaker since it emerged from bankruptcy in 2009.
Sales of the Chrysler 200 fell 63 percent in the first three months of the year compared to the year-ago period, as American buyers turn to SUVs and pickups over sedans and other mid-sized cars, partly due to low gas prices, Reuters said.
"So many buyers are shifting to [trucks] that there isn't any room for a relatively solid midsize sedan that could have survived only a few years ago," Karl Brauer, a senior analyst with Kelley Blue Book, told CNN Money.
In January, Fiat Chrysler’s CEO Sergio Marchionne said the company would cease making the midsize sedan as well as the compact Dodge Dart, if a partner was not found to keep the plant open. Marchionne had reportedly earmarked $1 billion to adjust Fiat Chrysler’s U.S. manufacturing to make more SUVs. While the Sterling Heights plant is expected to be revamped to build the next-generation Ram 1500 pickups, no timeline has been decided on the move yet.