Stellantis plans to cut 3,500 hourly jobs in its U.S. facilities, according to a United Auto Workers letter.
The UAW Local 1264, which represents workers at the Stellantis Sterling Heights Assembly Plant, posted the letter from local leadership announcing “corporate wide” buy out plans expected to come from the automaker.
Stellantis confirmed it plans to offer 33,5000 buyouts to hourly and salaried U.S. workers. The automaker’s target goal is 3,500 U.S. hourly workers accept the offer, Stellatnis spokesperson Jodi Tinson said. She declined to offer the target for salaried employees.
Stellantis employs 56,000 U.S. employees and 9,000 Canadian employees. Canadian salaried employees will not be part of the incentive program and Tinson declined to name a target for Canadian hourly employees.
The letter from union president Doug McIntosh went out to workers Monday, April 24. McIntosh writes local leadership met with Vice President Rick Boyer of the International Union to discuss incentive packages. He said the international union is in talks about accepting.
Stellantis plans to reduce its hourly workforce by 3,500 for both skilled and production, according to the letter posted to UAW Local 1264′s Facebook page. The Local 1264 and International Union could not immediately be reached for comment.
Stellantis owns the Jeep, Ram, Chrysler, Dodge and Fiat brands.
Downsizing the workforce is in response to Stellantis’ shift to electrification, Tinson said. She confirmed the automaker announced voluntary separation programs to certain non-union and union employees.
Stellantis is reviewing its North American operations to improve efficiency, reduce costs and protect the competitiveness of its products to allow for further strategic investments to support our transformation, Tinson said in a statement to MLive.
“These voluntary programs are being offered to provide a favorable option to employees looking to pursue new opportunities, while preserving critical roles the Company needs in order to maintain its competitive advantage,” Tinson said.
“To support the overall transformation to a mobility tech company, Stellantis continues to evolve its workforce by offering opportunities to learn new skills outside their existing skillset or enhance current skills.”
Voluntary separation packages are being offered to designated non-represented U.S. employees who have 15 or more years of service and work in certain organizations.
Stellantis will also offer certain represented employees in the U.S. and Canada an opportunity to separate from the company, according to the statement.
Information regarding the various packages will be communicated to eligible employees the week of May 1.
The incentive packages outlined in the UAW Local 1264 letter included the following details:
- Incentive Package for Retirement: $50,000 for seniority members hired prior to the 2007 agreement
- Voluntary Termination of Employment Program: guaranteed lumpsum benefit payment and is applicable to employees with at least 1 year seniority.
The letter listed tentative separation dates from June 30- Dec. 31 depending on when plants release the employee.
The union and Stellantis are preparing for talks ahead of a Sept. 14 deadline for a new four-year contract.
At the New York International Auto Show Stellantis CEO Carlos Tavares said high material costs are among the major hurdles facing the automaker, as it unveiled new Jeep products. He estimated the electric vehicle line cost 40% more to make than the internal combustion cars.
Prior to that April event, Tavares warned in February more job cuts could be coming as the cost of electrification eats into the company’s profit margins. That same month, the automaker idled its Jeep plant in Belvidere, Illinois, laying off about 1,350 workers indefinitely.
The race to electrification has been costly for the Big Three.
Earlier this month General Motors offered buyouts to 5,000 salaried workers, calling the buyouts a cost-saving measure to clear a path to electrification and avoid layoffs.
Ford also had hiccups this year as it switches gears into EV.
Production was halted for the electric SUV for seven weeks while Ford retooled a factory in Mexico to increase production. Additionally, production of the F-150 Lightning pickup truck stalled for nearly a month after a fire broke out at Ford’s Rouge Electric Vehicle Center in Dearborn.
Ford predicted it would lose $3 billion on electric vehicles this year. The automaker attributed the loss to heavy investments in new products and manufacturing offsetting sales.
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