Dive Brief:
- Stellantis is offering voluntary separation packages to roughly 6,400 of its 12,700 salaried employees as it looks to trim costs, the automaker confirmed in an email Monday. The Wall Street Journal first reported the news, citing remarks from Stellantis Chief Operating Officer Mark Stewart during a company meeting.
- The automaker will offer buyouts to nonunion employees with at least five years of experience, the company said.
- The buyouts come after Stellantis and the United Auto Workers union tentatively agreed to a new four-and-a-half-year labor contract, which increased base wages 25% for the automaker’s UAW-represented hourly workers.
Dive Insight:
Stellantis, along with General Motors, Ford and other automakers, is looking to reduce costs amid its transition to electric vehicles. In April, Stellantis offered buyouts to roughly 33,500 U.S. employees, including 2,500 salaried employees and some in Canada, in a similar cost-cutting move.
Earlier this month, Reuters reported that Stellantis will offer $50,000 buyouts in 2024 and 2026 to UAW production workers, allowing it to cut costs by hiring new workers that start at lower wages.
“As we prepare for the transition to electric vehicles, Stellantis announced today that it will offer a voluntary separation package to assist those non-represented employees who would like to separate or retire from the Company to pursue other interests with a favorable package of benefits,” Jodi Tinson, company spokesperson, said an email. “Stellantis is taking the necessary structural actions to protect our operations and the company.”
Under the tentative labor agreement with the UAW, autoworkers at Stellantis at the top of the pay scale would earn more than $40 per hour by the end of the contract, a total pay increase of over 30%. Entry-level autoworkers, meanwhile, would get a 67% increase over the previous collective bargaining agreement.
The labor agreement also reduces the time needed to reach the top of the wage scale from eight to three years. Despite rising labor costs, UAW president Shawn Fain said Stellantis would add 5,000 UAW-represented jobs by the end of the agreement.
Stellantis is also looking to make its EVs more affordable and profitable. In July, the company unveiled its STLA Medium global EV platform that will support a variety of vehicle configurations and body types to reduce production costs and improve scalability. The platform is also modular, allowing multiple EVs to share components to reduce production costs.
“As we look ahead to that electrified future, we need to maintain our profitability while remaining competitive,” the company wrote in a post on its labor negotiations website in September. “At 40% greater cost than conventional technology, passing the additional cost of electrification on to consumers is not an option, as it puts EV affordability at risk for middle-class buyers.”
The buyout offers come as Stellantis begins to implement its electrification strategy. The automaker plans for 100% of Stellantis’ passenger vehicle sales in Europe to be fully electric by 2030. For the North American market, the target is 50%.
