Stellantis is proposing buyouts as a way to cut 3,500 jobs from its U.S. hourly workforce and the UAW’s angry about the idea.
“Stellantis’ push to cut thousands of jobs while raking in billions in profits is disgusting,” said UAW President Shawn Fain 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.”
The UAW statement noted the auto company “made $18 billion in profits in 2022, and paid CEO Carlos Tavares $25 million.” Stellantis hasn’t offered comment on Fain’s response or the plan.
The details of the plan were laid out in a letter from United Auto Workers Local 1264 President Doug McIntosh. The now-public letter noted Stellantis is offering two packages. The first offer includes an Incentive Retirement Package, which provides a $50,000 cash to eligible employees, and the second is described a VTEP or Voluntary Termination of Employment Program, which will be offered to all hourly employees with at least one year of service.
Details still being ironed out
Anyone accepting the VTEP will be eligible for “a guaranteed lump sum benefit payment,” according to the McIntosh’s letter. The amount of the lump sum was not discussed in the letter. It would apparently be based on length of service and the final terms are still being worked out by the company and the union.
“The International union and corporate are in talks to accept all the members, who sign up for the packages, but this has not been confirmed yet,” the letter noted. “Openings created by member accepting packages would be filled by members on indefinite layoff.”
However, the letter also noted union members could start signing up for the buyout between May 6 and June 19. Separations would be complete by June 30 if the employee’s plant lets them go.
The company did not confirm it was prepared to offer buyouts, but it needs to find jobs for more than 1,300 United Auto Workers employees laid off at a Jeep factory in Belvidere, Illinois.
Shawn Fain, the UAW’s new president previously said the shutdown violated the UAW’s existing labor contract while also leaving the Belvidere workers without jobs.
EV transition leads to different strategies
Dispersing the Belvidere workforce throughout the company’s manufacturing system would move the company one step closer to making the shutdown of the Belvidere plant permanent and help pay for the transition to electric vehicles. General Motors followed a similar strategy when it slowed and then ended production at its assembly plant in Lordstown, Ohio before making it permanent during contract talks in 2019.
Only last year, Stellantis was holding job fairs around Detroit to recruit new employees, and labor market analysts have noted automakers could face shortages of workers in the months to come, particularly in the skilled trades.
At the same time, automakers expect to use substantially fewer workers to build the next generation of electric vehicles. Ford Motor Co. CEO Jim Farley has said building EVs will require 40% less labor than building conventional vehicles.
Meanwhile, though, Ford is adding employees to fill orders for its in-demand battery-electric vehicles, particularly the F-150 Lightning full-size pickup.
As the race for sales of battery-electric vehicles intensifies, Ford plans to hire 300 employees this summer at the company’s Electric Vehicle Center in the sprawling Rouge manufacturing complex in Dearborn, Michigan, just outside Detroit.
Other staffing moves
With this new staffing plan, Ford will have about 1,800 employees building the F-150 Lightning on three crews when the expansion of the electric vehicle center is complete at the end of July, following a six- week shutdown, Ford spokesperson Kelli Felker said.
Additionally, the automaker is adding a third crew with 1,100 employees at its assembly plant in Kansas City, Missouri this month to expand Transit and E-Transit, Felker noted.
Two years ago, Ford did use buyouts to reduce the size of its salaried staff.
GM announced this week it plans to halt production of the Chevrolet Bolt EV and EUV at its assembly plant in Orion Township, Michigan. But the workforce, now about 800, will “triple” in size when it is ready to produce a new generation of battery-electric truck in 2025, Barra said.
GM, however, took a $900 million charge against earnings to finance the voluntary buyout of some 5,000 salaried employees as part of effort to reduce costs by $2 billion, according to GM CFO Paul Jacobson.