What we know about possible job cuts at Stellantis, including Auburn Hills office tower
AUBURN HILLS, Mich. – Comments from the CEO at the Stellantis investor meeting suggest the possibility of considerable job loss for workers, especially at the Auburn Hills office tower.
Local 4 has been hearing rumblings about layoffs in Auburn Hills for a while now.
CEO Carlos Tavares made sure he came to town to alert everyone that his cost-cutting program was aimed directly at the building, which Lee Iacocca said he built with the profits he made from the minivan.
“We have at least two plants that need a significant turnaround, at least two,” said Tavares.
Tavares also said he’s sending European plant managers to clean up the mess, which should get everyone’s attention.
But then he talks about what he calls an “EV first strategy” and cost-cutting to compete globally with Chinese automakers:
“By the way, when we compare to leap motor, those 30% cost-competitive edge is what I’m always talking about,” Tavares said.
He’s looking to cut 30% of Stellantis costs.
“So, he’s going after the company with an axe right now to get costs down,” said Auto Analyst John McElroy.
Th move will send a massive shock wave through the industry.
“The old Chrysler group as we know it in Auburn Hills is going to be a mere shadow of itself in just a couple of years,” McElroy said.
McElroy also says the job loss is likely to be significant.
“They’re going to take a lot; we’re talking to thousands of people,” McElroy said.
The old Chrysler group makes the most money for Stellantis but also has the biggest costs and problems.
This means outsourcing engineering to the lowest-cost countries like Turkey and Morocco, which means the old headquarters building is likely headed the way of the Renaissance Center.
“Thetower almost undoubtedly will be up for sale,” McElroy said. “Stellantis doesn’t need all that office space anymore.”
We called Stellantis Media Relations on Wednesday (June 19), but they were closed due to Juneteenth. But we’re hearing that cuts could take effect by July.
When asked what the layoffs mean for the Big 3 regarding Telsa, Ford, and General Motors, McElroy says Stellantis is no longer an American company. It is now a foreign company
In view of the growing strength of Chinese competitors, Western car manufacturers are coming under increasing pressure to offer affordable entry-level electric car models. Stellantis has now finalised its plan for a Jeep for under 25,000 dollars.
At its investor day, Stellantis showed on a slide that it will probably launch a fully electric version of the Jeep Renegade (see the combustion version in the photo) for under 25,000 dollars in 2027. However, no further details were given. The Renegade has been available as a combustion model since 2014, it is considered a mini SUV and is produced on a production line with the Fiat 500X mini SUV and the Jeep Compass in Melfi, Italy. The Renegade is currently available in Germany from 31,100 euros.
Stellantis CEO Carlos Tavares first spoke publicly last month about offering a $25,000 all-electric Jeep vehicle in the US “very soon” to better appeal to mainstream customers at a time when electric vehicle adoption is growing slower than expected.
Tavares gave few details about the upcoming vehicle at the time, but said it would be priced at around $25,000 in the USA to mimic Stellantis’ pricing for the Citroen e-C3, a budget model that starts at 23,300 euros in Europe, or £21,990 in the UK.
“In the same way we brought the 20,000 Euro Citroen e-C3, you will have a $25,000 Jeep very soon,” said Tavares at a Bernstein investor conference in May. “We are using the same expertise because we are a global company and this is totally fluid across the engineering world of Stellantis.”
Stellantis currently offers an all-electric version of its Jeep Avenger in Europe, which starts at around €35,000. The vehicle is not sold in the US, where Jeep has so far focussed on plug-in hybrid electric vehicles. However, this is set to change soon: Jeep’s first all-electric vehicle in the US is expected to be the large Wagoneer S, which will be launched later this year. An off-road vehicle inspired by the Jeep Wrangler called the Recon is also expected this year.
Tavares said at the conference in May that the company expects to achieve cost parity between its all-electric vehicles and traditional internal combustion engine vehicles in the next “three years maximum” to better compete with the growing “China invasion” of affordable electric vehicles.
“It’s a very challenging period, very chaotic, very Darwinian,” said Tavares, referring to Chinese competitors, the switch to electric vehicles and the potential consolidation of the automotive industry. “We are in the storm, and this storm is going to last a few years.”
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