Stellantis (NYSE: STLA) announced Wednesday the layoff of approximately 1,100 workers at its Toledo, Ohio facility that produces the Jeep Gladiator. The decision, effective January 5, will reduce the South Assembly Plant’s operations from two shifts to one as part of broader efforts to improve efficiency and manage inventory across North America.

The automaker’s workforce reduction comes amid challenging times, with its stock value declining 39% this year. The company has recently restructured its senior management to address falling sales in the region.

The announcement has heightened tensions with the United Auto Workers (UAW) union, particularly following last year’s six-week strike. UAW President Shawn Fain has threatened another nationwide walkout, citing concerns including delays in Stellantis’ promised billion-dollar investment in Belvidere, Illinois, for a new battery plant and factory.

The company, however, maintains it is abiding by the terms of its labor agreement. Under the existing UAW contract, affected employees will receive one year of supplemental unemployment benefits.

While Stellantis maintains the layoffs are necessary to restore competitiveness and eventually resume previous production levels, the company faces mounting pressure to preserve American manufacturing jobs. President-elect Donald Trump warned of implementing a 100% tariff if Stellantis moves US jobs to Mexico.

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