Stellantis, the parent company of Chrysler, announced on Monday that it is offering voluntary buyouts to 6,400 of its salaried employees in the United States. This move comes as the company aims to cut costs during its transition to electric vehicles and in light of a new contract with the United Auto Workers (UAW).
The buyouts will be offered to approximately half of the company’s salaried U.S. employees who are not represented by a union. Currently, there are 12,700 such employees. However, the 2,500 Stellantis U.S. salaried workers who are unionized will not be eligible for the buyouts.
In order to be eligible for the voluntary departure package, salaried employees must have at least five years of experience with the company. Those who choose to take the incentive will depart before the end of December.
Stellantis stated that it is taking “necessary structural actions to protect our operations and the company” and cited preparations “for the transition to electric vehicles” as the reasons behind the buyouts.
This is not the first time Stellantis has offered voluntary exit packages to its employees. In April, the company extended the offer to 33,500 U.S. employees, including 31,000 hourly workers and approximately 2,500 salaried workers. Some employees in Canada were also offered voluntary buyouts.
Stellantis’ Chief Operating Officer, Mark Stewart, informed employees in April that a review of the company’s operations had highlighted the need for greater efficiency.
Additionally, in October 2022, the company offered voluntary buyouts to its U.S. salaried employees who were aged 55 or older and had worked for Stellantis for at least 10 years.
Under the new UAW contract, the company has agreed to offer $50,000 buyouts to veteran production and skilled trade members. Further buyouts will be offered in 2024 and 2026.
Stellantis revealed on October 31 that it would seek to offset the significant financial impact of strikes in North America, which resulted in substantial pay increases. The company is currently exploring potential cost-cutting measures.
Stellantis’ CFO, Natalie Knight, stated that the six-week strikes were unexpectedly long and would result in a profitability loss of less than 750 million euros ($800 million) and a revenue loss of around 3 billion euros for the full year of 2023.
However, the company did not provide estimates for the additional labor costs it will face in the future following the new agreements with unions in North America.
