Stellantis CEO Carlos Tavares speaks to media on June 13, 2024 following the company’s investor day at its North American headquarters in Auburn Hills, Mich.
Michael Wayland / CNBC
AUBURN HILLS, Mich. — Stellantis has achieved 8.4 billion euros ($9 billion) in cost reductions from the merger of Fiat Chrysler and PSA Groupe that created the company in January 2021, CEO Carlos Tavares said Thursday.
That amount is more than double initial expectations from when the merger was announced in 2019, and an increase from the updated 5 billion euros in expected reductions within five years of completion of the merger, which formed one of the world’s largest automakers.
Tavares said the largest reduction was achieved in the sharing and consolidation of engineering assets for the company’s vehicles, followed by purchasing.
Cost-cutting has been a critical mission of the veteran automotive executive. Other cost-saving measures have included reshaping the company’s supply chain and operations, as well as head-count reductions.
“We are not looking for our way; we know where we are going,” Tavares said during the automaker’s investor event at its North American headquarters, referring to the automakers 2030 “Dare Forward” strategic plan.
Since the merger was agreed to in December 2019, Stellantis has reduced head count by 15.5%, or roughly 47,500 employees, through 2023, according to public filings. Additional job cuts this year involving thousands of plant workers in the U.S. and Italy have drawn the ire of unions in both countries.
Several Stellantis executives described the cuts to CNBC as difficult but effective. Others, who spoke on the condition of anonymity due to potential repercussions, have described them as grueling to the point of excessiveness.
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