'Like crossing a chasm': Experts weigh in on Stellantis’ voluntary buyout packages

Stellantis will not be releasing the number of buyout packages being offered to unionized workers in Canada at this time, but the information could be in the hands of workers as early as next week.

As reported on Wednesday, the automaker said its cutting its workforce to trim expenses and stay competitive as the industry makes the long and costly transition to electric vehicles.

"In response to today’s increasingly competitive global market conditions and the necessary shift to electrification, Stellantis is thoroughly reviewing its North American operations to improve efficiency, reduce costs and protect the competitiveness of our products to allow for further strategic investments to support our transformation,” said Stellantis Canada spokesperson, LouAnn Gosselin.

“These voluntary programs are being offered to provide a favorable option to employees looking to pursue new opportunities, while preserving critical roles the Company needs in order to maintain its competitive advantage,” Gosselin said.

Stellantis employs 8,000 people between Windsor and Brampton assembly plants.

Unifor National President Lana Payne reacted Thursday, calling the decision ‘unilateral.’

“Unifor’s position is this decision does not negate the commitments the company made to invest in new vehicle and battery production in its Canadian operations,” Payne said in a statement to CTV Windsor.

Stellantis and LG Energy Solution are jointly investing $5 billion into the new NextStar Energy electric vehicle battery plant. The automaker is also spending $3 billion to create a research and development hub and re-tool both Windsor and Brampton Assembly Plants to build electric vehicles. All of the investments are being supplemented by hundreds of millions of dollars from all levels of government.

“Unifor intends to hold Stellantis firmly to these commitments,” Payne said.

Auto analysts say it’s partly due to a weakening economy but also an inevitable development happening throughout the auto industry.

“It's also a case of allocating maximum capital for the switch to an electric future,” said Bernard Swiecki, the vice president of Mobility and Research at the Detroit Regional Partnership.

Swiecki said all of ‘Big 3’ automakers, including Ford and General Motors, are looking to run leaner to aid in the transition.

“It's kind of like crossing a chasm in between this current reality that we face now and our electric future,” said Swiecki. “There's kind of a very expensive process you have to go through to make sure that you are in fact part of an electrified automotive industry a decade or two from now.”

Swiecki noted the transition taking place is the most significant shift that’s happened in the auto industry since its inception more than a century ago.

“If you invest heavily now, and you help your company make that transition faster, it helps you actually become more viable more quickly because you gets to spread these costs out over a larger number of units,” he said. “And that really was the key to making this industry sustainable and to making its products affordable to consumers 100 years ago when these companies were being formed.

”Those same economic principles are being applied to this electrification transition.”

Details of the hourly and salaried separation packages were not provided by the company.

Stellantis says information will be communicated to eligible employees the week of May 1, 2023.