Back when Lee Iacocca was running Chrysler the company famously offered motorists a chance to “Buy a Car, Get a Check.” These days, the automaker is part of a trans-Atlantic conglomerate and Stellantis has a new pitch aimed at its U.S. union workers: quit your job and get a check. More from Headlight.News.
The buyouts will provide Stellantis workers payouts of up to $72,000.
It’s been a bad year for Stellantis, the Euro-American automaker reporting substantial declines in sales and earnings in 2024. And its prospects for this year weren’t looking all that much better, even before Pres. Donald Trump signed an executive order piling 25% tariffs on imported autos – like those from the company’s Fiat, Alfa Romeo and Maserati brands.
That’s triggered a pitch by Stellantis aimed at U.S. hourly workers. It’s dangling buyout and early retirement offers aimed at members of the United Auto Workers Union at more than 20 of its facilities.
Those who agree to the deal could get as much as $72,000 if they have enough time on the job, but even novice employees could take home a substantial payout.
Why the buyouts?
Ram has had to offer hefty incentives on the 1500 pickup.
There’s no question Stellantis is struggling. The company had what it described as a “very tough year” in 2024, “a year we are not proud of,” said Chairman John Elkann. Its net profit tumbled 70%, to $5.8 billion, from the prior year’s record high. Operating income was off 64%, to $9 billion.
Much of the blame was the result of planning and marketing mistakes in North America, the automaker failing, for one thing, to come up with a replacement for the old Jeep Grand Cherokee. Normally the company’s biggest source of products, U.S. sales were off 15%, year-oer-year.
The downturn led to the sudden departure of CEO Carlos Tavares last November. Stellantis is still looking for a replacement. It has, meanwhile, been forced to trim production, even while amping up incentives on products like the big Ram 1500 pickup, as well as the still-new Dodge Charger Daytona EV.
What’s the deal?
The UAW won a new contract from Stellantis after a lengthy strike in late 2023.“Stellantis continues to review its operations to improve efficiency and protect its competitiveness in a very dynamic market,” said Stellantis spokeswoman Ann Marie Fortunate in a statement. “To help in that effort, the company announced that it is offering voluntary termination of employment and retirement incentive packages to represented production employees at its manufacturing and Mopar facilities in Detroit and Toledo as well as production, skilled and salaried bargaining unit employees at its facilities in Illinois.”
The offer is pretty simple, based on seniority, and targeting hourly workers at more than 20 facilities around Detroit and Toledo, Ohio:
- It starts with employees with 1 to 15 years of service with the company (and the old Chrysler and Fiat-Chrysler), who will get payments of $50,000;
- Those with more than 25 years of service can go home with a $72,000 payout;
- Those with 16 to 24 years on the job will get checks somewhere between those two figures.
More Stellantis News
- Even Domestic Automakers Will Feel the Hit of the Trump Auto Tariffs
- Departure of CEO Tavares Leaves Stellantis Rudderless
- Management Shake-Up Brings Back Some Former Execs
The UAW puts the blame for the buyouts on former Stellantis CEO Carlos Tavares (r), seen walking through the Warren, Michigan assembly plant.
The UAW’s reply
The UAW had expected, if anything, to grow jobs as part of the national contract the UAW negotiated with Stellantis in 2023 – though some analysts warned that the lucrative pay and benefit hikes the union won could backfire by raising production costs beyond what the automaker could afford.
For his part, Kevin Gotinsky, the head of the UAW’s Stellantis Department Director, put the blame for the buyout plan on “the mess left behind” by former CEO Tavares. In turn, he credited union leadership for making sure that, if there were job cuts, workers would be well compensated.
“We negotiated a package with the company’s new leadership team that gives workers as many options as possible,” Gotinsky said. “For those ready to retire, there’s a clear path. For others, voluntary termination is now on the table.”
Stellantis looks ahead
Stellantis Chair John Elkann continues his search for a CEO to replace Carlos Tavares, who resigned in December.
Stellantis Chairman Elkann tried to put a positive spin on things when announcing 2024 earnings, and the company is still forecasting better things ahead.
It this week proposed a $0.71-a-share dividend for stockholders and said its search for a new CEO is “well underway.”
But there’s growing concern about the auto industry as a whole, especially in light of the new 25% tariffs on import autos and auto parts Pres. Donald Trump announced on Wednesday. That could quickly translate into challenges for Italian-made Fiat, Alfa and Maserati products. But even the company’s U.S.-made vehicles face increased prices since they all use at least some imported parts and components.
What a way to run (or NOT RUN) a company. Wish them all the success they deserve.