Stellantis, the company resulting from the merger of Fiat Chrysler Automobiles and PSA Groupe, has proposed closing or reducing operations at 18 of its facilities. According to the details of its latest UAW deal, Stellantis is offering a comprehensive package of investments that will maintain labor costs and improve productivity.
In total, Stellantis plans to reduce its global manufacturing volume by 17 percent over the next five years. This is in line with the company’s plans to reduce operating costs. As part of the proposed restructuring, Stellantis is offering a mix of buyouts, retirement incentives and potential closure of some of its facilities.
The facilities affected by the potential closure or downsizing are located in the United States, Mexico, England and Italy. The most affected areas are the US and the UK, where facilities are expected to be closed down. In the US alone, Stellantis plans to close 13 assembly plants, as well as reduce employment at its Detroit manufacturing and engine plants.
In England, Stellantis plans to shut down the Ellesmere Port and Luton manufacturing facilities. And in Italy, the automotive giant will be closing its Melfi and Pomigliano assembly plants.
The latest proposal from Stellantis is yet another indication of the hard times automakers have been facing due to the pandemic, global economic slowdown and changing demand patterns in the auto industry.
With this latest deal, Stellantis is hoping to secure the long-term prospects of its operations. The company seeks to reassign employees affected by the closures or downsizing to other plants, while also committing to creating new jobs in different parts of the world.
Given the current state of the auto industry, it’s not surprising that Stellantis is taking such drastic steps. The company’s latest proposal is yet another sign of the changes that automakers have to make in order to stay competitive in today’s market.
