Stellantis confirms major U-turns despite battering UK industry with Luton plant closure and job losses
Vauxhall owner Stellantis has unveiled plans to keep all its Italian factories operational and reverse a decision to cut jobs in the United States, while moving forward with its plan to shut its Luton plant.
The world’s fourth-largest carmaker made this commitment despite challenging conditions in the European automotive sector, including weak market demand and growing competition from Chinese manufacturers.
The plan comes as the company faces particular pressure in the sluggish electric car market. As part of the commitment, all factories will remain open until 2032, with an investment boost of €2billion (£1.66billion) in 2025 alone.
Jean-Philippe Imparato, chief of Stellantis’ European operations, confirmed the investment plans would not require public funding.
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However, automotive output in Italy is expected to drop below 500,000 vehicles this year, down from 751,000 in 2023, according to FIM-Cisl union estimates.
Italy’s Industry Minister Adolfo Urso has pledged €1.6billion (£1.33billion) to support the country’s automotive supply chain, with over €1billion (£829million) being made available next year.
Stellantis, which employs around 40,000 people in Italy as the country’s sole major automaker, has seen relations with the Italian government improve following CEO Carlos Tavares’ departure.
This comes just weeks after Stellantis announced that it would be moving its UK-based electric van production to Ellesmere Port, potentially leading to the closure of the Luton factory and the loss of 1,100 jobs.
Unite union has called for Stellantis to halt its planned closure of the Luton factory following the recent departure of Tavares.
Unite general secretary Sharon Graham said: “Shutting the profitable Luton factory when it has just been made ready to produce electric vehicles from 2025 makes no sense.
“Time has now rightly been called on Carlos Tavares, whose counterproductive strategy of cutting Stellantis to the bone to artificially inflate profits has clearly failed.”
The union is demanding that Stellantis withdraw the redundancy deadline imposed under Tavares’ leadership to allow proper negotiations between workers, management and the Government regarding the plant’s future.
Carlos Tavares’ sudden exit from Stellantis came after targets were deemed unrealistic or destructive by some board members, according to sources who spoke to Reuters.
His leadership style had been characterised by what Unite described as a “counterproductive strategy” of making profits while shutting factories.
The abrupt resignation appears to have prompted a shift in company policy, particularly regarding workforce decisions, with a number of U-turns already being made.
In a significant reversal, Stellantis has cancelled plans to lay off approximately 1,100 employees at its Ohio Jeep plant.
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The decision means workers will return to their jobs in the new year following a broader reassessment of workforce decisions across Stellantis’ global operations.