Stellantis CEO Carlos Tavares speaks at the New York International Auto Show in Manhattan, New York City, April 5, 2023.
David Dee Delgado | David Dee Delgado Reuters
Detroit – Chrysler parent company star Buyouts are being offered to about half of U.S. white-collar workers in an effort to reduce headcount and cut costs at the automaker’s North American operations.
The company said Monday that the voluntary separation package will be offered to 6,400 of its 12,700 U.S. employees without bargaining units who have been with the company for five years or more.
The move marks the latest cost-cutting effort by the U.S. auto industry as companies try to lower costs amid economic concerns and billions of dollars in new investments in emerging technologies such as electric vehicles.Both General Motors and Ford Staff salaries were also cut last year.
“As the U.S. auto industry continues to face challenging market conditions, Stellantis is taking necessary structural actions to protect our operations and company,” Stellantis said in an emailed statement. “As we prepare for the transition to electric vehicles, Stellantis announced today that it will offer a voluntary severance program to help unrepresented employees who wish to leave or retire from the company to pursue other interests with a favorable benefits package.”
A Stellantis spokesman declined to comment on the number of headcount reductions the company hopes to make or the total cost. She also declined to comment on whether involuntary layoffs are planned if not enough employees accept buyouts.
Stellantis North America Chief Operating Officer Mark Stewart informed employees of the plan on Monday, which was first announced by Wall Street Journal.
The company said employees have until Dec. 8 to accept the buyout offer.
This marks Stellantis’ second round of paid buyouts this year. In April, the company expanded voluntary buyouts to about 33,500 U.S. employees, including 31,000 hourly employees who have been with the company for at least a year and 2,500 salaried, non-union employees who have been with the company for 15 years or more.
The latest acquisition comes weeks after the automaker reached a tentative agreement with the United Auto Workers on a new labor contract covering its 43,000 unionized workers.
The tentative agreement between Stellantis and the UAW also includes a voluntary buyout, which still must be approved by union members.
UAW says voluntary retirement incentive program will target $50,000 before tax In 2024 and 2026, there is no limit on the number of qualified production and technical trade members.
A Stellantis spokesman said the paid buyout proposal is not directly related to expected increases in U.S. labor costs resulting from the agreement with the UAW.
The union’s tentative agreement includes a 25% pay increase, with an 11% increase upon approval; reinstatement of cost-of-living adjustments; additional contributions for retirees; billions of dollars in new investments; and other benefits.
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