AP – Jeep maker Stellantis is laying off about 400 white-collar workers in the United States (US) as it deals with the transition from combustion engines to electric vehicles.
The company formed in the 2021 merger between PSA Peugeot and Fiat Chrysler said the workers are mainly in engineering, technology and software at the headquarters and technical centre in Auburn Hills, Michigan, north of Detroit. Affected workers were being notified starting on Friday morning.
“As the auto industry continues to face unprecedented uncertainties and heightened competitive pressures around the world, Stellantis continues to make the appropriate structural decisions across the enterprise to improve efficiency and optimise our cost structure,” the company said in a prepared statement.
The cuts, effective March 31, amount to about two per cent of Stellantis’ global workforce in engineering, technology and software, the statement said. Workers will get a separation package and transition help, the company said.
“While we understand this is difficult news, these actions will better align resources while preserving the critical skills needed to protect our competitive advantage as we remain laser focused on implementing our electric vehicle (EV) product offensive,” the statement said.
Chief Executive Officer Carlos Tavares repeatedly has said that electric vehicles cost 40 per cent more to make than those that run on gasoline, and that the company will have to cut costs to make EVs affordable for the middle class. He has said the company is continually looking for ways to be more efficient.
US electric vehicle sales grew 47 per cent last year to a record 1.19 million as EV market share rose from 5.8 per cent in 2022 to 7.6 per cent. But sales growth slowed toward the end of the year. In December, they rose 34 per cent.
Stellantis plans to launch 18 new electric vehicles this year, eight of those in North America, increasing its global EV offerings by 60 per cent.
But Tavares told reporters during earnings calls last month that “the job is not done” until prices on electric vehicles come down to the level of combustion engines – something that Chinese manufacturers are already able to achieve through lower labour costs.
