Stellantis CEO, UAW spar over worker absenteeism after robust 2021 earnings report

Stellantis CEO Carlos Tavares, on a day when his company reported $15.2 billion in 2021 profits, said absenteeism at U.S. factories outpaces the rest of the world.

The UAW didn't appreciate his comments and defended its members on Wednesday, citing the long hours and pressure it takes to work amid a pandemic.

Tavares said the absentee issue is not a concern because he believes the rate is similar for other automakers in the U.S. Tavares said that no labor shortage is preventing the company from churning out more cars. He blamed production constraints on the ongoing microchip shortage.

“It’s not a competitive penalty for our company,” Tavares said during a roundtable with European media Wednesday. “So we are discussing this matter with our unions and with our management to see how we can improve it. The fact is that, on the facts, there is a significant difference between the U.S. and the rest of the world. That's what we are observing by using the same” key performance indicators.

In North America, Stellantis said 2021 adjusted operating income rose 85 percent to $12.8 billion. Revenue increased 15 percent to $79 billion. Margins in North America climbed to a record 16.3 percent last year from 10.1 percent in 2020. The North American results generated profit-sharing for UAW members of $14,670 -- the largest payout in 35 years.

UAW Vice President Cindy Estrada, in a statement to Automotive News, responded:

“On a day that we should celebrate the rewards of the hard work and dedication of the UAW members here in the U.S., it is sad we have to defend the need for workers to have time off. The company has created a footprint that requires the U.S. operations to run 6 and 7 days a week, long hours to meet the demand for the high profitable vehicles the company sells.”

She added that “the extreme pressure to work these long hours in the midst of a pandemic causes our members to use their contractual time off to recover from illness, rest, spend time with their families or to care for their children. The level of profit announced today is a testament to the commitment to our members at Stellantis.”

Higher payouts

The union said it fought for an enhanced payout during the 2019 collective bargaining process. The formula increased to $900 per 1 percent of the North American profit margin, up from $800 in the previous contract.

Stellantis formed in January 2021 when Fiat Chrysler Automobiles merged with PSA Group.

Around 43,000 employees are eligible to receive profit-sharing payouts on March 11. The actual payments will be based on individual compensated hours.

"UAW Stellantis members are proud of the product they create every day, especially during challenging environments over the past two years," Estrada said in a statement. "We continue to make sure that this dedication in the face of pandemic and unforeseen parts shortages is recognized properly."

The automaker said U.S. hourly employees have been eligible to receive more than $59,000 in profit-sharing since 2009, including the latest payment.

The 2021 payout is 83 percent larger than the $8,010 allotment in 2020. UAW members at General Motors received $10,250 while Ford members earned $7,377.

Tavares said the Stellantis North America team is “mastering the business model” there.

The new Jeep Grand Cherokee L along with the Wagoneer and Grand Wagoneer are “whitespace” products that Tavares expects to be successful profit engines for the North American operation.

Ram, meanwhile, had its best share of the pickup market ever in 2021 at 26.2 percent. The average transaction price for Ram 1500 pickups was $51,000 last year, according to J.D. Power data.

"Employees are the heart of Stellantis," Tavares said in an earlier statement. "It is thanks to their continued focus on execution and excellence that we were able to achieve record results in our first year as Stellantis.

"Every Stellantis employee took on an extraordinary task in 2021 of combining two automakers while facing serious external challenges. Our goal is that all employees benefit from the company's profitable growth. We are pleased to reward and thank our team members for their tireless commitment."

Resumes

Tavares said Stellantis is receiving “tons of resumes,” although he admitted he doesn’t “always understand” why and it was unclear what the company's attrition rate is in North America.

The company has been looking to reshape its workforce. Stellantis North America said in November that it was offering buyouts to pension-eligible salaried U.S. employees, a move the automaker said will help align its business priorities while transitioning to a lineup of electrified vehicles.

To be eligible, the company said workers must be at least 55 years old and have been with the company for 30 years or at least 58 with 10 years of experience.  

Tavares believes applicants see Stellantis as a bold company.

“Our company is conveying a message of change, a message of bold thinking, a message of flexibility to the remote working, the message of shifting to be an automotive tech company that is attracting a lot of talents,” Tavares said. “And to my big surprise, many of those talents are coming from tech companies, which means that people do not see Stellantis as a dinosaur, and I think they are right. We are not a dinosaur. We are shifting very, very quickly.”

Shares in Stellantis rose 5.5 percent to $19.42 in midday trading.