TURIN – Stellantis CEO Carlos Tavares has told Italian unions that he will work with them to improve competitiveness and cut production costs at factories in Italy, where they currently are up to four times more than in France or Spain for a similar model.
Tavares, who met with union representatives at two former Fiat Chrysler factories in the Turin area this week, said the problem was primarily not labor costs but production costs on models that did not sell in anticipated numbers.
Unions have been worried that the merger of PSA Group and FCA to form Stellantis, which was finalized last month, could result in job losses, especially in Italy. Tavares has pledged not to close any assembly plants in Europe as a result of the merger.
A union source who attended the meeting told Automotive News Europe that Tavares gave workers several examples of the cost discrepancy between the Turin-area plants and those at PSA plants in Europe.
Tavares said the Maserati Levante midsize luxury crossover incurred about 3,300 euros ($4,000) in direct production costs per vehicle at the FCA factory in Mirafiori, while the Ghibli and Quattroporte luxury sedans cost about 6,000 euros per unit at the nearby Officine Giovanni Agnelli factory in Grugliasco.
In contrast, Tavares said that direct production costs for a similar vehicle built in France, such as the DS 7 Crossback built in Mulhouse, would amount to about 1,400 euros.
He said the Fiat New 500 full-electric small car, which is built in another part of the huge Mirafiori complex, incurs about 1,200 euros of direct production costs, compared with 500 euros for the similar Opel Corsa-e built at the PSA plant in Zaragoza, Spain.
A Stellantis spokesman confirmed the figures, explaining that direct production costs included labor; amortization of R&D, tooling and plant structural costs; and energy use.
Three industry experts consulted by ANE for this article said direct production costs represent about 20 percent of the total production cost of a volume model, and up to 35 percent for low-volume premium and luxury models. Material accounts for the remainder.