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Low cost brains. Stellantis reportedly decided to hire most of its engineers in countries such as Morocco, India and Brazil. No solution is excluded to lower costs (look at the 14 thousand layoffs in Tesla’s plans). Automakers face Chinese competition and falling demand, which weighed on first-quarter revenues, deliveries and margins. It’s not a trend limited to automotive: Google is laying off at least 200 employees from its “core” structure, i.e. from key teams and engineering talent, according to CNBC. As part of the unit reorganization, the company will take on corresponding roles in Mexico and India.
The new hires of Stellantis engineers, according to sources consulted by Bloomberg, would take place at a cost per employee of around 50 thousand euros per year, even less. In Paris or Detroit the price can reach five times as much (150-200 thousand dollars). The group of 14 brands would aim to occupy about two-thirds of engineers in low-cost countries in the long term. In addition to savings, the new hires are expected to help add expertise in areas such as software, artificial intelligence and battery cell chemistry.
THE car maker Westerners are suffering from the decline in demand for electric cars. The challenge is to build more accessible vehicles. Also Volkswagen is cutting jobs: the German group has launched a 900 million euro incentive package for senior white collar workers in Germany, responses must be given by May. As for Stellantis, it is gradually moving part of its production to Poland, Serbia and Morocco. Although the pressure is greatest among mass-market brands, even premium manufacturers such as BMW they are creating white-collar jobs in India and other countries where labor costs are significantly lower.
Stellantis is betting much of its future on the success of cheaper vehicles, such as the 23,300 euro electric Citroen ë-C3, produced in Europe, and whose deliveries will begin in the second quarter. Producing electric vehicles at affordable prices, a goal repeatedly stated by CEO Carlos Tavares, means that the company must try to achieve greater savings. On Tuesday 30 April, Stellantis announced its first quarter results: it suffered a sharp decline of 12% in revenues and 10% in deliveries. “We will continue to optimize labor costs, an aspect that has been important for both white-collar workers and, to a lesser extent, blue-collar workers,” said the CFO Natalie Knight.
Even the rival Renault is looking for talent in emerging markets. In recent years the Boulogne-Billancourt group has eliminated around 1,500 positions in France and created engineering centers in Romania, Brazil and South Korea. Luca de Meo, CEO of the transalpine group, praised the the country’s “high level of expertise” in areas such as engineering, cloud, artificial intelligence and autonomous driving.
