Inform employees about exciting jobs elsewhere

Employees regularly receive alerts about job fairs and services that help craft winning resumes, so much so that union representatives are accusing management of harassment.

“It’s not a good way to motivate people to work hard for the company,” said Christine Virassamy, a CFDT union representative. “We asked them to let go.”

The unusual effort shows just how eager CEO Carlos Tavares is to slash the sprawling carmaker’s payroll in key European markets as it strives to make the 5 billion euros ($5.7 billion) synergies promised as part of the 2021 merger between Fiat Chrysler and the PSA group. France alone could see up to 10,000 departures by the end of 2025, according to estimates by some unions.

Like rivals across Europe that are rapidly shifting to electric vehicles, Stellantis – with 14 car brands and some 300,000 employees worldwide – is under pressure to cut its workforce. Electric vehicles are simpler to produce and require less labor than conventional vehicles. Emails promoting career changes outside of Stellantis are intended to help those who may be interested in a voluntary departure program, a company spokesperson said.

“The transition to electric vehicles is unprecedented in terms of speed and impact for the automotive industry,” said Alexandre Marian, managing director in Paris at AlixPartners. “There will be winners and losers given the level of investment required, and that will have implications on the workforce.”

In a study published in December for the French car lobby, of which Stellantis is a member, the firm estimates that France risks losing almost a third of its car jobs by the end of the decade. The grim prediction could be applied to other countries, especially in Europe, Marian said.

Required encoders

While Stellantis and other mainstream automakers plan to retrain staff and hire software specialists to develop self-driving and digital features for their future models, not all mechanics will be able to code.

“Workforce reduction remains an industry challenge,” Citigroup analyst Gabriel Adler wrote in a report. The average age of employees in the industry in Europe is between 40 and 45 and workers mainly focus on conventional engines, he said.

At Stellantis, the drive to get people out is accelerating in France, where the company employs around 45,000 people and controls 34% of the market, driven mainly by Peugeot and Citroën sales. In Italy, home to brands such as Fiat and Alfa Romeo, Stellantis has entered into a number of so-called performance agreements with unions. With 50,800 workers, Stellantis also offers incentives for voluntary departures.

Stellantis began talks with French unions on February 1 on a two-year plan for 2,600 voluntary job cuts. Union leaders predict that downsizing will continue at least at the same pace through 2025. When early senior staff departures are included, the numbers could reach as high as 8,000. Further, they say, up to 2,100 workers could leave to work in joint ventures in the north of France: Automotive Cells Company for batteries, and Emotors and e-Transmissions activities. The Stellantis spokesperson called the union’s estimates “false”.

The union figures are largely an extrapolation of current trends highlighted by the company. These include the voluntary departure plan, the approximately 1,400 employees who may be transferred to the joint ventures and various other estimates of early retirement and future needs of the joint ventures. Last year, there were 1,380 voluntary departures and 1,100 new hires, mainly in sales and engineering.

EV Revolution

Tavares said his quest to make Stellantis more efficient won’t necessarily include site closures and job cuts. Still, he warned that the rapid shift to electric vehicles will require annual productivity gains of 10%, up from 2-3% in previous years. It can also be caused by supplier compression.

Rivals like Volkswagen AG and Renault SA are also under pressure to downsize to compete with Tesla Inc. and other new entrants that don’t make combustion engines. VW CEO Herbert Diess has come under fire from labor representatives accusing him of plotting mass layoffs to make the company more nimble.

The political stakes are high because of the job risk. As Renault plans to cut thousands of jobs in France, it has also pledged to the government to keep much of its electric vehicle manufacturing at home around the same time the automaker agreed to a loan state-backed to get through the pandemic.

One of the biggest overlooked risks of electrification to the balance sheets of traditional automakers, according to Citigroup’s Adler, is that their factories making combustion engines become stranded assets.

With such doomed foundries in rural France – from Jinjiang Industries Europe’s auto parts plant in Aveyron to Renault’s Fonderie de Bretagne in Caudan which makes cast metal parts for combustion engines – workers feel the pinch.

This story was published from a news feed with no text edits. Only the title has been changed.

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