Automaker Stellantis offers buyouts to 60 percent of its U.S. workforce
- Stellantis is offering 33,000 hourly and salaried workers voluntary buyout offers
- The automaker, one of Michigan’s largest employers, seeks to trim its workforce as it shifts production to electric vehicles
- The Stellantis move means all of the “Detroit Three” automakers are shedding thousands of workers within a year
Stellantis is the latest major U.S. automaker taking steps to trim its workforce as it plans to extend voluntary buyout offers next week to about 60 percent of its American workforce.
About 33,000 hourly and salaried workers will receive the offers, according to a statement from the company. Another 8,000 Canadian workers reportedly will also get offers.
The move by Stellantis’ North American division— headquartered in Auburn Hills and one of Michigan’s largest companies — comes as the automotive industry shifts toward electrification, prompting waves of cost-cutting.
- Ford job cuts a blow to Michigan efforts to expand highly skilled workforce
- GM offers buyouts to ‘majority’ of 35,000 salaried workers in Michigan
- Stellantis chooses Indiana over Michigan for EV battery factory
Electric vehicles are about 40 percent more expensive to produce than autos with gas-fueled engines, Stellantis’ Chief Executive Officer Carlos Tavares has said, making it hard for the automaker to meet consumers’ price expectations.
Financial pressures also come from expensive up-front investments in factory retooling and new production centers, including factories for EV batteries. For most automakers, EVs are not yet profitable, though many — including General Motors and Ford Motor Co. — say profitability is just a few years away, as they increase both EV production and sales.
At Stellantis, the company “is thoroughly reviewing its North American operations to improve efficiency, reduce costs and protect the competitiveness of our products,” the company said in a statement.
The savings, it added, will “allow for further strategic investments to support our transformation.”
Stellantis operates four of Michigan’s 12 auto assembly factories and five of the state’s 23 component manufacturing sites, according to MICHAuto, the auto industry-focused division of the Detroit Regional Chamber.The company also has manufacturing facilities in Windsor, Ontario, and Toledo.
Stellantis spokesperson Jodi Tinson said a headcount of Michigan-based workers was unavailable Wednesday. MICHAuto estimated in 2022 that about 41,000 state residents worked at Stellantis.
Tavares warned in January that job cuts and plant closures could be coming due to the costs associated with electrification.
In February, the automaker idled a 5-million-square-foot factory in Belvidere, Illinois, that made the Jeep Cherokee. The move put 1,350 workers on indefinite layoff while all production stopped at the plant.
That same month, Stellantis chose a site in Kokomo, Indiana, for a $2.5 billion electric vehicle factory with partner Samsung SDI. It also announced a $155 million investment in three Indiana factories that the company said would help it convert half of its sales to EV by 2030.
The new factory location in Kokomo was a blow to Michigan, but “a win for American manufacturing,” Glenn Stevens, executive director of MICHAuto, said at that time. He called Stellantis “critical” for Michigan.
“They are no doubt one of our most important corporate citizens when it comes to research development, engineering and advanced manufacturing,” Stevens said then.
“So, as electrification happens, we want to make sure that we're right there as partners with them.”
Other automakers engaged in the EV transformation are making similar decisions about trimming their workforce. Ford laid off 3,000 people in summer 2022. Among them were 2,000 salaried workers.
And in February, GM offered voluntary buyouts to most of its 35,000 salaried workers in Michigan. About 5,000 people took the offer, resulting in a $1 billion cost to the company.
Stellantis has a target goal of 3,500 hourly workers that choose to take the buyout, Bloomberg reported.
Information on the buyouts will go out to affected Stellantis workers next week, Tinson said.
UAW President Shawn Fain criticized the company for cutting its workforce.
“Stellantis’ push to cut thousands of jobs while raking in billions in profits is disgusting,” Fain said in a statement.
“This is a slap in the face to our members, their families, their communities, and the American people who saved this company 15 years ago” (from bankruptcy).
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