United Auto Workers President Shawn Fain on Wednesday blasted the maker of Jeep SUVs, Ram pickup trucks and other vehicles for offering voluntary buyouts to thousands of hourly and salaried workers, calling the move “disgusting.”
Stellantis NV declined to provide workforce reduction targets for both the bargaining and non-bargaining workforces, but spokesperson Jodi Tinson said the offer was made to 31,000 hourly workers in the United States and Canada and 2,500 U.S. salaried employees. The letters will be mailed next week.
A letter from a local United Auto Workers president circulating earlier this week on Facebook suggested the company is looking to reduce its hourly workforce by as many as 3,500 employees in response to increased market competition and the shift to electrification.
Stellantis’ U.S. sales in the first quarter dropped 9% year-over-year, and inventory levels are building up again after years of pandemic-induced supply chain snags. Although executives have said order books remain strong for the first half of the year, they have cautioned there is more uncertainty for the latter half as inflation hits customer pocketbooks and interest rates rise.
Meanwhile, the company is investing $35.5 billion into electrification and software by 2025 to launch 25 all-electric vehicles for the U.S. market by 2030, though none currently are available. Those EVs represent a 40% increase in cost to build over their gas- and diesel-powered counterparts, requiring the company to find those cost savings so as not to reduce its customer base from affordability issues, Stellantis CEO Carlos Tavares has said.
The UAW, however, pointed to Stellantis posting $18 billion in profit globally in 2022 with $14.9 billion in adjusted operating income from North America. The automaker will share first-quarter shipments and revenue on May 3.
“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. Even now, politicians and taxpayers are bankrolling the electric vehicle transition, and this is the thanks the working class gets. Shame on Stellantis.”
In an email sent on Wednesday to employees from Mark Stewart, Stellantis’ chief operating officer for North America, that was obtained by The Detroit News, he said the automaker is making “solid progress” on its Dare Forward plan.
“As we look to accelerate that progress, we have been conducting a thorough review of our operations, which has made it clear that we must become more efficient,” he said. “We know that investment decisions at Stellantis are based on many key factors, starting with market conditions, quality and transformation costs. As a team, we must continue to identify efficiencies to make our operations more competitive both inside and outside the Company. The competition is fierce, and the cost of electrification cannot be passed on to the customer. Make no mistake, we intend to win in the marketplace.”
Details of the salaried separation packages weren’t immediately available. The buyouts are being offered to designated non-represented U.S. employees with 15 or more years of service.
Hourly workers will have until June 16 to accept, Tinson confirmed. Separation will be effective as soon as the end of June and continue through the end of the year. Retirement-eligible seniority workers will receive $50,000. Others with at least one year with the company will be offered a lump sum based on years of experience with the company.
“These voluntary programs,” spokesperson Shawn Morgan said in a statement, “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.”
The buyouts come as the automaker has taken other actions to reduce its workforce and footprint. That includes idling indefinitely the Belvidere Assembly Plant in Illinois, affecting 1,350 workers.
“Our union is working around the clock to get justice for the members impacted by these job cuts,” UAW Vice President Rich Boyer said in a statement regarding the buyouts. “We look forward to Stellantis doing the right thing by the workers who make this company run.”
Stellantis last fall made available early retirements to certain U.S. salaried employees, though it hasn’t said how many employees accepted the offer.
GM recently offered white-collar workers buyouts, with about 5,000 accepting. Ford Motor Co. has made similar packages available to employees too.
bnoble@detroitnews.com
Twitter: @BreanaCNoble