AutoBeta(AutoBeta.net)07/31 Report--

Stellantis, the world's fourth-largest automaker, is considering cutting more than 1200 engineering jobs in Europe and the United States, the Financial Associated Press reported on July 31. It is also reported that Stellantis will provide a new round of voluntary buyout seniority plan for salaried employees in the United States in order to cut costs and cope with falling profits. In a letter to employees, Stellantis said it would offer voluntary buyout plans to non-union US employees at the vice president level or below in some functions, and that layoffs could be taken if not enough workers accepted the voluntary departure plan.

As of press time, Stellantis officials have not yet responded to the news, and it is not clear how many employees will be affected by the measure.

At present, traditional carmakers are facing electric transformation, and layoffs are part of the transformation measures, which can solve the impact on employment in the process of energy and technology transformation on the one hand, and cut costs for enterprises on the other. Stellantis, the world's fourth-largest carmaker, is an exception.

In March, Stellantis laid off 400 skilled workers and software engineers in the US, a move involving 2 per cent of the relevant departments. Since then, a further voluntary layoff agreement has been signed with Italian trade unions, resulting in a total of 2500 layoffs in Italy. At the time, Stellantis said the layoffs were voluntary, mainly for employees nearing retirement age or willing to accept new career opportunities, and employees could choose to leave voluntarily and receive financial compensation. Earlier, at the end of 2023, Stellantis cut production shifts at its Toledo and Detroit plants and announced that the two plants would cut a total of 3500 workers.

It is understood that the Stellantis will provide a new round of voluntary buyout seniority plan for US salaried employees in the hope of cutting costs to cope with falling profits. According to reports, Stellantis said in a letter to employees that it would provide a voluntary buyout plan for non-union American employees at the vice president level and below of "certain functions". Layoffs may be adopted if not enough employees participate in the voluntary buyout plan. As of press time, Stellantis officials have not yet responded to the news, and it is not clear how many employees will be affected by the measure.

On July 25th, Stellantis Group announced its financial results for the first half of 2024. According to the financial report, in the first half of 2024, Stellantis Group's net revenue was 85.017 billion euros, down 14 percent from the same period last year, lower than the expected 87 billion euros; net profit was 5.647 billion euros, down 48 percent from the same period last year, below expectations of 6.97 billion euros. In addition, in the first half of the year, Stellantis Group achieved an adjusted operating profit of 8.463 billion euros, with an adjusted operating profit margin of 10%.

For the reasons for the decline in net revenue and net revenue compared with the same period last year, Stellantis Group said that the former was due to declining sales and poor structure, while the latter was due to the adverse effects of slippery sales and poor structure, as well as foreign exchange factors and restructuring costs.

Tang Weishi, CEO of Stellantis Group, pointed out that the results of Stellantis Group in the first half of the year were lower than expected, reflecting the challenging industry environment and the operational problems of Stellantis Group itself. In response to the decline in results in the first half of the year, Stellantis promised to take measures to solve problems in North American and other regional markets, including production cuts, and to launch no less than 20 new cars this year, which, if properly implemented, will bring greater opportunities and make a profit in the second half of this year.

In addition to product updates, Mr Tang also revealed that some of the group's unprofitable brands might be shut down, saying: "if they do not make money, the group will close down and cannot afford unprofitable brands." However, Stellantis Group did not specify which brands would be shut down. There is news in the market that luxury car brand Maserati may be sold. In response, Stellantis said it had no intention of selling or merging the unit with other Italian luxury groups, saying in a statement: "Stellantis reaffirms its strong commitment to Maserati's bright future, which is the only luxury brand among the group's 14 car brands." At the same time, Stellantis reaffirmed its commitment to Maserati's entire portfolio.

With regard to the Stellantis Group's annual operating target for 2024, the Stellantis Group reiterated that its business goal of "achieving double-digit adjusted operating profit margins by 2024 and positive industrial free cash flow" will remain unchanged. Stellantis officials said they expected the above indicators to develop in a favorable direction in the second half of this year, thus supporting positive industrial free cash flow throughout the year. As for longer-term development, the Stellantis Group plans to launch eight new models based on the large STLA Large platform between 2024 and 2026.

Generally speaking, due to the decline in market demand and high investment in electrification, automakers, including Stellantis, are facing a lot of pressure. For this reason, many automakers choose to reduce costs and increase efficiency to cope with the cold winter of the industry. It remains to be seen whether Stellantis will meet its annual targets after offering a new round of voluntary buyouts to salaried US employees and closing its unprofitable brands.

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