Stellantis offers buyouts to half of its salaried US staff
By Chris Isidore, CNN
New York (CNN) — Stellantis is offering buyouts to half of its salaried US staff in a cost cutting move.
The European automaker, which builds cars for the US market under the Jeep, Ram, Dodge and Chrysler brands, said the offers would be made to all salaried staff with five years or more of seniority at the company. That comes to 6,400 of the 12,700 nonunion staff.
“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,” said the company’s statement. “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.”
The workers with less than 10 years of service time will get three months of their normal pay. The size of the buyouts will increase with more seniority. Those with 20 or more years at the company would get a full year’s pay if they leave.
Stellantis would not say whether or not the cost-cutting move with its salaried staff is being driven by the projected increase in labor costs associated with its recently negotiated tentative labor deal with the United Auto Workers union or the cost of a strike that went more than seven weeks at the company.
The tentative contract with the UAW would raise hourly wages by 11% immediately and give guaranteed raises totaling an additional 14 percentage points over the life of the contract. It would also include cost-of-living adjustments and increased contributions to the 401(k) plans of workers hired since 2007.
Stellantis and other established automakers are investing tens of billions of dollars to transition from gasoline powered vehicles to electric vehicles in the coming years, including building new factories to make the batteries that will be needed to power the EVs.
While Tesla, which makes nothing but EVs, is the nation’s most profitable automaker, so far the established automakers are not making money on the EVs they are selling. Stellantis has yet to put any pure EV cars for sale in the US market and has more to do to catch up.
General Motors and Ford, which also just reached tentative labor deals with the UAW, both announced cuts to their salaried staff, with both layoffs and buyouts, in the months before the strike.
The-CNN-Wire
™ & © 2023 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.
