Fiat Chrysler to lay off 1,300 at plant in Michigan

DETROIT — Fiat Chrysler Automobiles said Wednesday it will lay off about 1,300 workers at a Detroit-area plant as it cuts back on production of its poor-selling Chrysler 200 midsize sedan amid growing U.S. demand for crossovers and SUVs.

The automaker told the United Auto Workers union, its workers and the state of Michigan that it is eliminating a shift of workers at the Sterling Heights plant starting July 5. Another 120 workers will be laid off at the nearby Sterling stamping plant.

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

Still, the layoffs come as the U.S. automotive industry is in the middle of five consecutive years of record sales. It is the first large-scale U.S. job cut by the automaker since it emerged from bankruptcy in 2009. FCA has added about 11,000 hourly workers in the U.S. since 2011 and has reported monthly sales gains for 72 straight months.

The layoffs come about three months after FCA CEO Sergio Marchionne said the automaker plans to eventually phase out production of the Chrysler 200 and the Dodge Dart. In January, Marchionne said the two models "will run their course," but the company has not said when production will end. Marchionne also has said FCA is looking for a partner to potentially build small cars for the automaker at some point in the future.

Marchionne is in the middle of refocusing the company's strategic plan and is shifting its North American production footprint to focus on SUVs and pickups in the U.S. and smaller vehicles in Mexico.

The Sterling Heights plant is widely expected to gain production of the next-generation Ram 1500 pickup, which is currently made at a different Detroit-area plant, in Warren. But the transition, if it happens, isn't likely to occur for about 18 months or more.

FCA spokesman Gualberto Ranieri declined to comment Wednesday on when the company would provide additional details about the timing or details of its U.S. production plans.

FCA's decision to eliminate a shift at the plant also comes one day after Ford confirmed that it will build a new plant in Mexico to make small cars starting in 2018. General Motors, while also emphasizing truck production, is continuing to build small cars in the U.S. It laid off about 500 workers at the assembly plant where the Chevrolet Sonic is built last fall and has moved those workers to other plants.

Tuesday, the UAW called Ford's decision "very troubling." The union was more optimistic about FCA's move Wednesday.