AUBURN HILLS, Mich. – It’s highly discouraging news for Metro Detroit after last week’s Stellantis investor meeting, where CEO Carlos Tavares promised a massive cost-cutting effort.
It may mean considerable job loss for workers, particularly at the Auburn Hills office tower.
Local 4 has been hearing rumblings about layoffs in Auburn Hills for a while now.
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.
The 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.
“The tower 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.