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FCA to cut 1,300 jobs amid falling demand for Chrysler 200

ABR Staff Writer Published 08 April 2016

Fiat Chrysler Automobiles (FCA) will cut nearly 1,300 jobs at its Sterling Heights Assembly plant starting from 5 July.

The layoffs come in the wake of reduced production at the facility due to declining demand for Chrysler 200 midsize sedan.

The automaker has informed the United Auto Workers (UAW) union, its employees and the state of Michigan about the job cuts.

UAW Vice President Norwood Jewell said: "While today's announcement of a shift reduction at Sterling Heights Assembly is unfortunate, it is not unexpected. FCA is not the only company experiencing a slow market for small cars.

"On a bright note, there is a strong demand for larger-sized vehicles. The company has been planning to increase its capacity to build more trucks and SUVs. I believe that in the long term this move will be a positive one for our members and the company."

The layoffs do not come as a surprise, as the US auto industry may be headed for slower growth after recording strong sales for the past five years.

FCA has seen a growth in sales for 72 consecutive months in the past and added nearly 11,000 hourly workers in the US since 2011.

The latest retrenchment announced by the company is its first significant employee downsizing move after emerging from bankruptcy in 2009.

In January, FCA CEO Sergio Marchionne had said that the company plans to "eventually" stop the production of the Chrysler 200 and the Dodge Dart, without mentioning the exact timeline, Detroit Free Press reported.

The job cuts comes a day after FCA announced plans to a build a plant in Mexico to manufacture small cars. The plant is expected to start production by 2018.