Stellantis, the parent company of Chrysler, has announced that it will offer buyouts to approximately half of its U.S. white-collar employees in an effort to reduce headcount and cut costs for its North American operations. The voluntary separation packages will be offered to 6,400 of the company’s 12,700 non-bargaining unit U.S. employees with five or more years of employment.
This move comes as the U.S. auto industry faces challenging market conditions and prepares for the transition to electric vehicles. Stellantis is aiming to protect its operations and company amid these conditions, and the buyout packages are intended to assist employees who would like to separate or retire from the company to pursue other interests with a favorable package of benefits.
This is the second round of salaried buyouts for Stellantis this year, as in April the company offered voluntary buyouts to about 33,500 U.S. employees. The latest round of buyouts comes just weeks after Stellantis struck a tentative deal with the United Auto Workers (UAW) for new labor contracts covering its 43,000 unionized workers. The tentative agreement includes voluntary buyouts and is yet to be ratified by union members.
The UAW has stated that the voluntary incentive plan for retirement will be for $50,000 pretax for an unlimited number of eligible production and skilled-trade members in 2024 and again in 2026. However, the salaried buyout offers are not directly connected to expected increases in U.S. labor costs as a result of the deal with the UAW.
The UAW’s tentative union agreement includes 25% wage increases, reinstatement of cost-of-living adjustments, additional contributions for retirees, billions in new investments, and other benefits. Overall, Stellantis is taking necessary structural actions to protect its operations and navigate the changes and challenges in the automotive industry. Employees will have until December 8 to accept the buyout offers, and the company has not commented on whether involuntary layoffs are planned if not enough employees accept the offers.