Stellantis, the parent company of Chrysler, has announced that it will be giving voluntary buyouts to around half of its white-collar U.S. employees in order to reduce the company’s headcount and cut costs for its operations in North America.
The voluntary separation packages will be offered to 6,400 out of 12,700 non-bargaining unit U.S. employees who have been with the company for at least five years. This move is in line with the recent cost-cutting efforts in the U.S. auto industry as companies try to reduce expenses amid economic uncertainties and new investments in technologies such as electric vehicles.
General Motors and Ford Motor have also cut their salaried workforce over the past year. Stellantis says it is taking necessary actions to protect the company and its operations as the U.S. automotive industry continues to face challenging market conditions.
The company has declined to comment on how many employees it aims to cut or the total costs involved, as well as on whether involuntary layoffs are planned if not enough employees accept the buyouts. Employees have until December 8 to accept the buyout offers.
This is the second round of salaried buyouts for Stellantis this year, following the announcement in April that around 33,500 U.S. employees, including hourly and salaried nonunion employees, were offered voluntary buyouts.
The latest buyouts come after the company struck a tentative agreement with the United Auto Workers union for new labor contracts covering its 43,000 unionized workers. The tentative agreement also includes voluntary buyouts, and the union stated that the retirement incentive plan would be for $50,000 pretax for eligible production and skilled-trade members in 2024 and 2026.
The company spokeswoman clarified that the salaried buyout offers are not directly linked to expected increases in U.S. labor costs as a result of the agreement with the UAW, which includes various wage increases, cost-of-living adjustments, additional contributions for retirees, and new investments.
Mark Stewart, Stellantis North American Chief Operating Officer, informed employees of the program, which was first reported by The Wall Street Journal. He stated that the company is preparing for the transition to electric vehicles and is offering the voluntary separation package to assist employees who would like to pursue other interests with a favorable package of benefits.
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