“Massive” Cost-Cutting: Stellantis May Downsize Auburn Hills In Attempt To Cut 30% Of Costs

Just when you thought the worst cuts in the auto industry were over as a result of overspending on EVs and extortion new contracts from labor unions, more layoffs look like they could be on their way. 

At last week’s Stellantis investor meeting, CEO Carlos Tavares said a ‘massive’ cost cutting effort would be underway, according to Click On Detroit, who says this could mean layoffs at the Auburn Hills office tower. 

The report says that Tavares visited to specifically announce his cost-cutting program targeting the building that Lee Iacocca claimed was funded by minivan profits.

Tavares is dispatching European plant managers to address issues, aiming to draw attention from his employees. He also outlined an “EV first strategy” and cost-cutting measures to compete with Chinese automakers globally.

“We have at least two plants that need a significant turnaround, at least two,” the CEO said. “By the way, when we compare to leap motor, those 30% cost-competitive edge is what I’m always talking about.”

Auto Analyst John McElroy said: “So, he’s going after the company with an axe right now to get costs down. 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.”

“They’re going to take a lot; we’re talking to thousands of people,” he continued. “The tower almost undoubtedly will be up for sale. Stellantis doesn’t need all that office space anymore.”

The Chrysler group, while the most profitable for Stellantis, also has the highest costs and issues. To reduce expenses, engineering is being outsourced to low-cost countries like Turkey and Morocco, signaling the old headquarters building might face a fate similar to the Renaissance Center.

Tavares says he is looking to cut 30% of costs at the company, according to the report.