To achieve this, the company is seeking support from the Roman government while simultaneously preparing to lay off thousands of workers, primarily on a voluntary basis.

The automotive giant, Stellantis, which ranks as the world's third-largest car manufacturer, is set to carry out layoffs affecting more than 3,000 workers across its Italian units. These layoffs, coordinated with labor unions, are mainly attributed to the reduced manpower demand due to the shift towards electric vehicle production. An agreement reached with employee representatives on Wednesday indicates that the layoffs will predominantly occur on a voluntary basis.

Stellantis, which owns brands such as Fiat, Alfa Romeo, Lancia, and Maserati, plans to reduce its workforce by more than a thousand positions in its Melfi, Pomigliano d'Arco, and Termoli plants. The reductions will affect not only assembly line workers but also white-collar employees, as reported by Reuters.

Further Layoffs Pending by Stellantis

Previously, Stellantis executed a voluntary reduction of more than 1,500 positions at its largest facility in Turin, and dismissed a hundred individuals from its Pratola Serra engine manufacturing plant. No agreement has yet been signed for another major Stellantis assembly plant in Italy that manufactures Alfa Romeos in Cassino.

The FIOM industrial union disclosed that Stellantis had proposed 850 voluntary layoffs at this site, but it is expected that the final number will be lower. Similarly, there is no agreement yet for Stellantis's van manufacturing plant in Atessa, Central Italy.

Stellantis, a conglomerate with American, French, Italian, and German roots, currently employs about 43,000 people in Italy, nearly 15,000 of whom are located in its stronghold, Turin. Following the 2021 merger of Peugeot-Citroen SA and Fiat Chrysler Automobiles, Stellantis initiated with a workforce of 55,000 in Italy. Since then, the company has gradually reduced its Italian workforce by offering generous severance packages and social benefits to encourage voluntary departures, particularly among those nearing retirement, as per Bloomberg.

At the same time, tensions between the Italian government and Stellantis appear to be easing. The conflict arose as the company not only reduced jobs but also relocated production out of Italy for cost-cutting reasons, prompting industry experts to mourn the decline of the once-legendary Italian auto industry.

Dispute between Meloni and Tavares

The assembly of the new electric Fiat Panda was moved to Serbia, and Stellantis recently announced the assembly of the Chinese Leapmotor T03 electric mini car in its Tychy plant in Poland.

A verbal exchange ensued between CEO Carlos Tavares and Prime Minister Giorgia Meloni, with Meloni leveraging the potential establishment of Chinese automotive leaders like BYD, Geely, and SAIC, known in Europe under the MG brand, as a bargaining chip against Stellantis.

Despite Meloni's reported skepticism towards China, her government has taken steps to limit Chinese investments and Italy's participation in China's "One Belt, One Road" initiative, citing neo-colonial motivations.

Unmoved by the "Chinese card," Stellantis continues its cost reduction strategies while adopting a more conciliatory tone towards Rome. Discussions are underway to boost Italian production from approximately 750,000 units last year to one million, seeking government support in the process.

Last year, Stellantis successfully expanded its production in Italy by 9.6%, manufacturing a total of 751,384 vehicles.

Part of the Rome support might include a recently launched €930 million scrappage scheme, offering generous state aid to lower-income Italians replacing their old vehicles with electric ones, preferably Fiats.

The Italian Ministry of Transport reported a 19% increase in new car registrations in the country last year, totaling approximately 1.57 million. However, electric cars remain a rarity, accounting for a fraction of the total market share compared to other developed European economies.

Therefore, stimulating consumer interest in electric vehicles is of public interest, as their popularity in Italy falls below the EU average.

Leapmotor: Affordable Chinese Electric "Small Car" Coming to Europe

In Poland, the Stellantis Tychy base is set to start production of the economical yet appealing T03 model from Chinese electric vehicle maker Leapmotor this spring. Aiming to conquer the European market, the introduction of this entry-level electric vehicle will be followed by more models.