Make / Model Search
News - StellantisStellantis chasing cheaper workersEngineers from developing countries hired as part of Stellantis cost-cutting drive9 May 2024 LIKE other car-makers around the planet, Stellantis is on a cost-cutting mission to make its cars more affordable while maximising profits – and to achieve the desired outcome, it is focusing on white-collar remuneration packages.
The giant conglomerate that includes Alfa Romeo, Chrysler, Citroen, Dodge, Fiat, Jeep, Lancia, Maserati, Opel, Peugeot, Ram and Vauxhall is feeling the effects of seemingly endless supplies of relatively low-cost electric cars coming out of China and is acting to address the issue.
In line with directives from Stellantis CEO Carlos Tavares, accountants and others within the company have figured out massive savings are possible through hiring key engineering staff from developing countries where wages are up to five times lower than for equivalent employees in Europe and the United States.
Auto industry commentators say it may be easier to cut white-collar pay using the Stellantis model than deal with the potential union implications of cutting blue collar staff or wages.
The car-maker has already started hiring engineers in Morocco, Brazil and India on $US53,000 (A$80,618) a year to save costs. Engineers in Europe and the US are currently paid in the range of $US150,000 ($A228,154) to $US200,000 ($A304,182) including benefits.
Stellantis says it is looking further afield for engineering staff as a result of having to contend with lower cost competition and slowing demand.
According to Automotive News (AN) and Bloomberg, western auto-makers are feeling the strain from slowing battery electric vehicle (BEV) demand while they struggle to build more affordable vehicles.
Manufacturers such as Tesla and Volkswagen Group are cutting jobs and moving some production to cheaper locations.
“Stellantis is currently among the more aggressive and now aims to have roughly two-thirds of the company’s engineers in lower-cost countries over the longer term.”
The cost issue is not solely affecting mainstream manufacturers but also premium brands like BMW which is also sourcing white-collar jobs out of India and elsewhere – and paying a lot less.
Renault is also heavily involved in a similar cost-cutting exercise that has so far had mixed results.
Stellantis says the trigger behind its cost cutting-drive are vehicles such as the €23,300 ($A38,000) electric Citroen eC3 due to start deliveries about now.
“Making affordable vehicles means we must seek more savings,” said Mr Tavares as he issued a stark warning in January on “disregarding the reality of your cost situation”.
The task in front of Stellantis is monumental as it has 25 new models scheduled for introduction this year.
As yet, the cost-cutting exercise has not been effective, with Stellantis shares slumping 10.5 per cent – their biggest drop in four years – following its first-quarter revenue presentation.
During the presentation, Stellantis CFO Natalie Knight admitted that returns in Europe were suffering from declining demand.
“There is always more potential when it comes to cost discipline,” Ms Knight said.
“We are going to continue to optimise our labour costs – this is something that has been important both on the white-collar and, to a lesser extent, on the blue-collar side.”
AN reports that Stellantis is also looking to add expertise in areas such as software, artificial intelligence and battery chemistries and views the industry as a global playing field in “deep transformation with new Chinese players arising”.
The first effects of this new broom was felt last month at the North American Stellantis headquarters in Auburn Hills, Michigan when about 400 salaried engineering jobs were cut including people working on vehicle calibration and electronics and controls.
Meanwhile, Stellantis is seeking to hire electronics engineers to work in Mexico.
“Stellantis also plans to hire about 500 engineers to add to the almost 4000 it already has in Brazil, South America,” COO Emanuele Cappellano said in an interview.
“The engineers, many of whom are based in Betim, focus on global projects,” he said.
But there have been teething problems for example in the steering system of the “Smart Car” platform originally developed by India’s Tata Consulting Services, says AN.
Dozens of French and Italian engineers had to be flown in to work on fixes.  Read more18th of April 2024  Dongfeng considers hybrid production in ItalyChinese brand could produce 100k units per annum, Italian govt to announce decision shortly5th of April 2024  Stellantis CEO questions EV mobility fixOne-size-fits-all approach not the solution to mobility, EVs will not work in every market: Tavares |
Click to shareStellantis articlesMotor industry news GoAutoNews is Australia’s number one automotive industry journal covering the latest news, future and new model releases, market trends, industry personnel movements, and international events. |
Connect with us
Facebook Twitter Instagram