Stellantis (NYSE: STLA), the parent company of Chrysler, is initiating a new round of cost-cutting measures in response to challenging market conditions and the industry’s shift towards electric vehicles.
Approximately half of the 12,700 nonbargaining unit US employees with five or more years of employment, totaling 6,400 employees, will be offered voluntary separation packages.
This move follows similar actions by other major US automakers, including General Motors (NYSE: GM) and Ford (NYSE: F), as they grapple with economic uncertainties and substantial investments in emerging technologies.
Related: General Motors Shares Fall After Offering Its US Employees Paid Voluntary Separation
“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,” Stellantis said in a 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.”
Employees will have until December 8 to accept the buyout offers, marking the second round of salaried buyouts for Stellantis this year. In April, the company extended voluntary buyouts to approximately 33,500 US employees.
While the company has not disclosed specific figures or total costs associated with the latest buyouts, a Stellantis spokeswoman confirmed that the offers are unrelated to expected increases in US labor costs resulting from a tentative agreement with the United Auto Workers (UAW).
Related: UAW, Ford Reach Tentative Deal That Proposes 25% Pay Bump
The UAW deal includes significant provisions such as 25% wage increases, reinstatement of cost-of-living adjustments, additional contributions for retirees, and billions in new investments. The voluntary incentive plan for retirement, part of the UAW agreement, offers eligible production and skilled-trade members $50,000 pretax in 2024 and again in 2026.
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