Stellantis USA is planning personnel cuts of $200 million by the end of 2024, reports Automotive News. This was stated by Chief Financial Officer Natalie Knight. The primary reason is electric cars, which require significant investments and, consequently, cost reductions in other areas. Stellantis CEO Carlos Tavares also cited the issue of electric vehicles manufactured in China making their way around the world as one of the reasons why Stellantis must become more efficient. The company must be “totally competitive in terms of costs at the highest level. Without cost competitiveness, we will not be able to face Chinese competition.”
Stellantis anticipates new layoffs in North America by the end of 2024
The number of employees in North America of the automotive giant will decrease during this year. Additionally, part of the engineering work is being outsourced and, in parallel, the range is being consolidated on a small number of versatile platforms capable of supporting different body styles and powertrains. Many high-profile North American executives have left the company this year, increasing the uncertainty created by multiple job cuts. Stellantis has begun recruiting most of its engineering workforce in low-cost countries such as Morocco, India, and Brazil and is trying to source 80% of its components in regions where it can get the best prices.
During the recent Investor Day, Knight stated that the automotive company has managed to ensure that 90% of outsourced engineering services come from countries with more advantageous costs. Carlos Tavares’ search for greater efficiency has already led to buyout offers and layoffs of salaried employees in recent months. The manager also stated that at least two U.S. plants “need a significant turnaround,” which could mean further job cuts.
When PSA Group and Fiat Chrysler Automobiles decided to merge in December 2019, the companies stated that their union would produce about $4 billion in synergies through optimized investments in platforms, engine families, and new technologies, while leveraging greater scale on the purchasing side. Since then, that number has risen to $9 billion thanks to the company’s ongoing mission to simplify operations.
Furthermore, Stellantis is streamlining its logistics operations by bringing more distribution in-house. The Group will use more than 1,000 trucks in Europe to control the transport of vehicles between its plants and the end customer, as stated by Maxime Picat, head of purchasing and supply chain. Picat stated that outbound logistics costs in Europe will decrease by 25% in the second half of 2024 compared to the previous year.
Stellantis is launching the STLA Small, STLA Medium, STLA Large, and STLA Frame platforms in addition to the Smart Car and a light commercial vehicle platform. The STLA Large platform will underpin a diverse mix of Jeep, Dodge, Alfa Romeo, Chrysler, and Maserati vehicles, totaling eight models through 2026. It will debut in the United States this year on the Jeep Wagoneer S and Dodge Charger Daytona.