Stellantis, a multinational automaker, has recently laid off 400 American employees in its engineering, software, and technology departments in March. In response, the company is now focusing on hiring low-wage engineers in Brazil, India, Mexico, and Morocco to cut costs.
The layoffs in the United States were announced on March 22, with Stellantis executives aiming to save money by gradually reducing the workforce. This move has prompted the company to seek engineers in countries where salaries are significantly lower than in the US.
Meanwhile, Stellantis CEO Carlos Tavares has become the highest-paid executive in the car manufacturing industry, receiving a $39 million compensation package in April. Despite this, the company is looking to hire engineers in low-wage countries to reduce costs even further.
However, this outsourcing strategy has raised concerns about potential production issues for Stellantis. For example, there have been instances where engineers from France and Italy had to be flown into India to address problems with the Smart Car platform developed by an outsourcing company. Additionally, production launch problems at Stellantis’s Michigan plant have led to layoffs of nearly 200 workers.
The decision to lay off American employees while expanding in low-wage countries has drawn criticism from unions and industry insiders. The United Auto Workers (UAW) President described Stellantis’s leadership as “pathetic” for prioritizing cost-cutting measures while increasing executive pay.
Overall, the shift towards hiring low-wage engineers in other countries poses challenges for Stellantis, both in terms of production issues and employee relations within the company.
