The automaker behind Chrysler, Dodge, and Jeep vehicles just announced a $2.26 billion payout to its shareholders — less than two weeks after the company used President Donald Trump’s new auto tariffs to lay off nearly a thousand American workers.

On April 4, Stellantis, one of the country’s “Big Three” automakers, announced the temporary layoffs at five US factories and production pauses at facilities in Canada and Mexico. The Dutch conglomerate, which subsumed Fiat Chrysler Automobiles in 2021, told its employees it had “decided to take some immediate actions” in response to Trump’s sweeping tariffs, which included a 25 percent tax on auto imports.

“With the current path of painful tariffs and overly rigid regulations, the American and European car industries are being put at risk,” said John Elkann, chairman of Stellantis’s board of directors, at the company’s April 15 general assembly meeting.

But that risk wasn’t enough to stop shareholders at the meeting from voting to reward themselves with $2.26 billion in total dividend payments. Shareholders also voted to pause the company’s annual stock buyback program, which involved purchasing $3 billion in Stellantis stock last year to inflate asset prices for company investors and executives. This year’s dividend payout to investors alone accounts for roughly half of the company’s profits last year.

The United Auto Workers (UAW) president Shawn Fain blasted the company’s decision: “Two weeks ago, Stellantis said the sky was falling because of auto tariffs, and said they had to lay off workers, claiming they are losing money. But then all of a sudden, a miracle happened: they found billions of dollars, nearly half of last year’s profits, to pay to Wall Street!”

In 2024, Stellantis’s $5 billion in profits amounted to a 70 percent drop from the previous year. But in 2023, Stellantis netted $20 billion, an 11 percent increase, making it the single most profitable year in the company’s history. In consecutive years before that, Stellantis boosted its margins to $18 billion, surpassing its net profits from 2019, before the pandemic.

All the while, the company paid extravagant dividends to investors. In 2023, the same year the UAW went on strike, Stellantis returned $7.5 billion to shareholders in dividends and buybacks, a 53 percent increase from 2022. The payments would eat up all of the company’s net profits the following year.

One criticism of stock buybacks is that the money could be better spent elsewhere, such as capital-intensive product development, higher wages, or rainy-day funds in case of a massive supply disruption, such as the one caused by the pandemic five years ago.

Multiple studies show this capital misallocation also hurts companies’ long-term prospects. For example, a 2015 Harvard Business Review analysis found that if General Motors, one of the other Big Three automakers, had saved the $20 billion it spent on stock buybacks between 1986 and 2002 and instead “earned a modest 2.5 percent on it, the company would have had $35 billion on hand when the financial crisis and Great Recession hit and probably would not have had to file for bankruptcy protection.” General Motors’ 2009 bankruptcy filing led the US government to bail out the company and Chrysler (now Stellantis) with $80 billion in taxpayer funds.

Stellantis’s recent layoffs follow a major contract dispute between the UAW and company management. In a 2023 labor agreement that the union struck with Stellantis to end a six-week-long strike, the company agreed to reinvest in an Illinois plant that had been shuttered in 2023, laying off 1,350 workers that year. Stellantis tried to walk back the plant’s reopening last August, before being pressured to honor its promise this past January.

UAW president Fain pointed out to the Lever in an interview this month that while Stellantis cut jobs in response to Trump’s tariffs, other automakers took a different approach. General Motors, for example, was better prepared for tariffs and on April 3, announced it would ramp up production at its Fort Wayne, Indiana, plant to avoid paying some of the tariff duties on foreign imports.

Meanwhile, Stellantis announced this week that it would restart some production at its assembly plant in Windsor, Ontario, without resuming any of the jobs it had cut in the United States.

“Stellantis shows the same old, tired philosophy of making workers pay for their bad decisions,” Fain told the Lever.