In a recent investor meeting, Stellantis CEO Carlos Tavares announced a 30% cost-cutting initiative aimed at enhancing the company's competitiveness against Chinese automakers. This move is anticipated to result in significant job losses, particularly at the company's headquarters in Auburn Hills, MI.
The cost-reduction plan focuses on operational efficiencies and cost competitiveness. Tavares mentioned that there are "at least two plants that need a significant turnaround, at least two." European plant managers will be overseeing these changes.
A crucial aspect of this strategy is the "EV first strategy," designed to streamline operations and concentrate on electric vehicle (EV) production. Tavares highlighted the cost advantage compared to Leapmotor, a Stellantis-owned Chinese auto manufacturing startup. "By the way, when we compare to Leapmotor, that 30% cost-competitive edge is what I'm always talking about," he said.
Auto analyst John McElroy told Local 4 that Tavares' approach is aggressively cutting expenses. "The old Chrysler group as we know it in Auburn Hills is going to be a mere shadow of itself in just a couple of years," McElroy predicted, suggesting that many jobs could be at risk as Stellantis looks to outsource engineering to lower-cost countries like Turkey and Morocco.
The potential sale of the Auburn Hills headquarters building is also being considered as Stellantis reduces its need for extensive office space.
"The tower almost undoubtedly will be up for sale," McElroy said.
Stellantis Media Relations was not available for further comment, but industry insiders suggest that layoffs could begin as early as July.
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