UAW: Stellantis will offer buyouts to cut hourly workforce by 3,500

The maker of Jeep SUVs, Ram pickup trucks and other vehicles is looking to reduce its U.S. hourly workforce by as many as 3,500 employees through buyouts, according to a letter posted by a United Auto Workers local on Facebook.

Stellantis NV spokeswoman Jodi Tinson said she wouldn't respond Tuesday to the details in the letter dated Monday from Doug McIntosh, president of Local 1264, which represents workers at the automaker's stamping plant in Sterling Heights.

Indefinitely laid-off workers would have the opportunity to fill in the created openings, McIntosh noted. The potential offer of incentive packages comes ahead of critical contract negotiations later this year with the UAW that will influence labor costs, product allocation and how workers at plants producing electric vehicles and their components are treated. This all comes as the outlook for the second half of the year remains uncertain, thanks to inflation, higher interest rates and other economic uncertainties.

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The UAW's newly elected president, Shawn Fain, last week discussed a "fractured" relationship with Stellantis regarding its approach to electrification and following the indefinite idling in February of the Belvidere Assembly Plant in Illinois, which affected 1,350 workers. His remarks reflected the ongoing tension expressed by Fain and other UAW leaders with the Detroit Three automakers, including calling them the "enemies" and that the UAW must "punch them in the mouth."

Stellantis plans to launch 25 all-electric models for the U.S. market by 2030. CEO Carlos Tavares has emphasized the need to find savings because electric vehicles are 40% more expensive than their internal combustion engine counterparts.

In his letter, McIntosh wrote that the local's leadership had a conference call with UAW Vice President Rich Boyer, head of the union's Stellantis Department, about the incentive packages that will be offered corporate-wide for production and skilled trades workers. The UAW and automaker are in talks to accept everyone who signs up for the offer, McIntosh wrote.

He said two packages will be offered. The incentive package for retirement, called "IPR," would provide $50,000 for seniority workers hired prior to the 2007 agreement. The voluntary termination of employment program, or "VTEP," provides a "guaranteed lumpsum benefit payment" for employees with at least one year of seniority.

The sign-up dates tentatively are scheduled for May 6 to June 19, McIntosh said. Separation dates would begin June 30 and run through the end of the year. Packages are expected to be mailed to eligible workers in the next week or so.

A UAW spokesperson did not immediately respond to a request for comment.

The potential offers by Stellantis appear to indicate that the automaker is seeking to avoid hourly layoffs and stay on good terms with the union as it frees up capital for electrification, said Marick Masters, a management professor at Wayne State University.

“The industry is in a such a position it doesn’t have time to wait,” he said. “It’s going to take its chances on aligning its cost structure to permit its capital investment plans to go ahead as needed. And they’re going to work with the union to the greatest extent possible to keep it on board in what is making a difficult, but necessary decision, given what is going on in the state of the industry.”

The report from McIntosh comes as Local UAW 1700 leaders blasted plans at Sterling Heights Assembly Plant to cut jobs that they said would lead to layoffs following an assessment of efficiencies at the facility.

Stellantis in October also cut the third shift at its Warren Truck Assembly Plant, home of the Wagoneer SUV and Ram Classic pickup truck, in response to the global chip shortage. It, however, plans to bring back the shift after it has addressed quality issues and as it ramps up production of the longer-wheelbase version of the Wagoneers.

Stellantis last fall made available early retirements to certain U.S. salaried employees, though it hasn't said how many employees accepted the offer. GM recently offered white-collar workers buyouts, with about 5,000 accepting. Ford Motor Co. has made similar packages available to employees, too.

bnoble@detroitnews.com

Twitter: @BreanaCNoble