DETROIT (AP) — Stellantis, the maker of Jeep and Ram, said it will offer severance packages to many of its U.S. white-collar workers, just five days after the company’s CEO said the auto industry was in the midst of a major storm.
The company told employees that eligible employees will receive individual offers in mid-August. The offers will be limited to certain functions that Stellantis has not identified. It also has not said how much it plans to reduce its workforce. The company has about 11,000 employees in the United States.
It was unclear whether similar offers would be made in other countries.
In a statement Tuesday, Stellantis said it was facing inflationary pressures as it worked to make affordable vehicles for its customers. “We remain focused on implementing the necessary measures to reduce our costs to protect the long-term sustainability of the business,” the company said in its statement.
The company said in an email to employees that it would provide severance packages based on years of service, as well as lump-sum cash payments to help cover health care costs. It would also provide job placement services, the email said.
“We must continue to adapt by streamlining our operations and finding efficiencies that will improve our competitiveness to ensure our future sustainability and growth,” the email said.
After disappointing first-half results, CEO Carlos Tavares said Thursday the industry was in for a storm. Net profits fell 48% from the same period last year.
Tavares also told reporters last week that the global auto industry is caught between consumers looking for more affordable vehicles and demands for additional capital spending to develop new electric and gasoline-powered vehicles.
In North America, Tavares said, Stellantis let its inventories get too high and plans to address that in the first half of the year didn’t work. He said list prices are too high and often scare customers away early in the buying process, even if discounts are available.
In March, the company announced it would lay off 400 white-collar workers in the United States as it manages the transition from combustion engines to electric vehicles.
In November 2023, the company formed by the 2021 merger of PSA Peugeot and Fiat Chrysler made buyout and early retirement offers to 6,400 non-union employees. It did not say how many of them accepted the offers.
