Stellantis, the result of the merger between Fiat Chrysler and PSA Groupe in January 2021, has exceeded expectations in cost reductions, according to CEO Carlos Tavares. The company has achieved 8.4 billion euros ($9 billion) in cost savings, more than double the initial projections made when the merger was announced in 2019. This accomplishment positions Stellantis as one of the world’s largest automakers.
Tavares highlighted that the largest reduction in costs came from the sharing and consolidation of engineering assets for the company’s vehicles, followed by purchasing. This demonstrates the efficiency of combining the resources and expertise from both Fiat Chrysler and PSA Groupe. By streamlining these areas, Stellantis can optimize its operations and achieve significant savings.
Cost-cutting has been a top priority for Tavares, who has implemented various measures to reduce expenses. In addition to consolidating engineering assets and optimizing purchasing, Stellantis has also reshaped its supply chain and operations. These efforts have allowed the company to achieve substantial cost reductions.
One of the ways Stellantis has reduced costs is through head-count reductions. Since the merger agreement in December 2019, the company has already reduced its workforce by 15.5%, which equates to approximately 47,500 employees, according to public filings. However, these job cuts have faced criticism from unions in the U.S. and Italy, as they have led to thousands of plant workers losing their jobs.
Despite the challenges and criticism, Stellantis executives have described the cost-cutting measures as necessary and effective. These measures have been instrumental in achieving the significant cost savings that have surpassed initial expectations. However, some individuals, speaking anonymously due to potential repercussions, have expressed concerns about the extent of the job cuts, describing them as excessive and grueling.
Stellantis remains focused on its long-term strategic plan, known as “Dare Forward,” which outlines the company’s goals for 2030. Tavares emphasized that the company has a clear direction and is determined to achieve its objectives. With its strong position as one of the world’s leading automakers, Stellantis is poised for continued success in the industry.
In conclusion, Stellantis has successfully achieved significant cost reductions following the merger between Fiat Chrysler and PSA Groupe. The company’s CEO, Carlos Tavares, announced that Stellantis has surpassed initial expectations by achieving 8.4 billion euros ($9 billion) in cost savings. These savings were primarily driven by the sharing and consolidation of engineering assets and optimizing purchasing. While the cost-cutting measures have faced criticism, particularly regarding job cuts, Stellantis executives believe they are necessary and effective. With a clear strategic plan in place, Stellantis is well-positioned for future growth and success in the automotive industry.
 in savings. CEO Carlos Tavares highlights the consolidation of engineering assets and optimized purchasing as key drivers. Despite criticism of job cuts, Stellantis remains focused on its long-term strategic plan for continued success in the automotive industry. Read more here.){kind=link}