TURIN – Stellantis CEO Carlos Tavares has told the Italian trade unions that he will work with them to improve competitiveness and reduce production costs in factories in Italy, where they are currently up to four times higher than in France or Spain for one similar model.
Tavares, who met union officials at two former Fiat Chrysler factories in the Turin area this week, said the problem was primarily not labor costs, but production costs for models that were not being sold in the expected numbers.
Unions fear that last month’s merger between PSA Group and FCA to create Stellantis could result in job losses, particularly in Italy. Tavares has promised not to close any assembly plants in Europe due to the merger.
A union source attending the meeting said Automotive News Europe that Tavares gave workers several examples of the cost discrepancy between the plants in Turin and those in PSA plants in Europe.
Tavares said the Maserati Levante midsize luxury SUV at FCA’s Mirafiori plant incurs around € 3,300 in direct production costs per vehicle, while the Ghibli and Quattroporte luxury sedans at the nearby Officine Giovanni Agnelli plant in Grugliasco cost around € 6,000 per unit.
In contrast, according to Tavares, the direct production costs for a similar vehicle built in France as the DS 7 Crossback built in Mulhouse would be around 1,400 euros.
He said the all-electric small car Fiat New 500, which is being built in another part of the huge Mirafiori complex, incurs around 1,200 euros in direct production costs, compared to 500 euros for the similar Opel Corsa-e built at the PSA plant in became Zaragoza, Spain.
A Stellantis spokesman confirmed the numbers, stating that the direct cost of production included labor. Amortization of R&D, tooling and plant structure costs; and energy consumption.
Three industry experts consulted by ANE For this item, the direct production cost was about 20 percent of the total production cost of a volume model and up to 35 percent for premium and low volume luxury models. Material makes up the rest.