Stellantis, one of the Big Three U.S. automakers, on Monday offered buyouts to about half of its salaried employees as it looks to cut costs as it transitions to electric vehicles (EVs) and takes on increased costs from a new union contract.
The parent company of major car brands like Chrysler, Dodge, Jeep and Ram offered voluntary buyouts to about 6,400 of its roughly 12,700 salaried employees who aren’t represented by a union and have at least five years of experience. Employees who accept the incentive will depart the company before the end of December. Stellantis has an additional 2,500 salaried union members who aren’t being offered the current buyout.
“As the U.S. automotive industry continues to face challenging market conditions, Stellantis is taking the necessary structural actions to protect our operations and the Company,” the company said in a statement Monday. “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.”
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The company added that it remains committed to its “Dare Forward 2030” strategy, which includes the launch of eight new EVs.
Stellantis said on Oct. 31 that it would look to offset the financial hit from the United Auto Workers (UAW) strikes in the U.S. through potential cost cuts after the tentative labor agreement the company reached with the UAW brought big pay increases.
Under the tentative deal which is currently in the process of being ratified by union members, Stellantis would gradually raise wages for UAW members by 25% over the new four-and-a-half-year contract.
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Chief financial officer Natalie Knight said the six-week strikes were unexpectedly long and could cost the company less than $800 million in terms of profitability in 2023. The company hasn’t provided estimates on the additional labor costs it will incur under the tentative labor agreement.
The voluntary buyouts are the latest to be offered by Stellantis after the company in April offered exit packages to 33,500 employees in the U.S., including 31,000 hourly workers and 2,500 salaried workers. It also offered buyouts to some of the company’s employees in Canada.
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In October 2022, Stellantis offered buyouts to salaried employees in the U.S. who were aged 55 or older and had worked for the company for at least 10 years.
Reuters contributed to this report.