TURIN – Stellantis CEO Carlos Tavares has informed Italian unions that he’ll work with them to enhance competitiveness and minimize manufacturing prices at factories in Italy, the place they at present are as much as 4 instances greater than in France or Spain for the same mannequin.

Tavares, who met with union representatives at two former Fiat Chrysler factories within the Turin space this week, mentioned the issue was primarily not labor prices however manufacturing prices on fashions that didn’t promote in anticipated numbers.

Unions have been apprehensive that the merger of PSA Group and FCA to type Stellantis, which was finalized final month, might end in job losses, particularly in Italy. Tavares has pledged to not shut any meeting vegetation in Europe because of the merger.

A union supply who attended the assembly informed Automotive Information Europe that Tavares gave employees a number of examples of the fee discrepancy between the Turin-area vegetation and people at PSA vegetation in Europe.

Tavares mentioned the Maserati Levante midsize luxurious crossover incurred about 3,300 euros ($4,000) in direct manufacturing prices per automobile on the FCA manufacturing facility in Mirafiori, whereas the Ghibli and Quattroporte luxurious sedans value about 6,000 euros per unit on the close by Officine Giovanni Agnelli manufacturing facility in Grugliasco.

In distinction, Tavares mentioned that direct manufacturing prices for the same automobile in-built France, such because the DS 7 Crossback in-built Mulhouse, would quantity to about 1,400 euros.

He mentioned the Fiat New 500 full-electric small automobile, which is in-built one other a part of the massive Mirafiori advanced, incurs about 1,200 euros of direct manufacturing prices, in contrast with 500 euros for the same Opel Corsa-e constructed on the PSA plant in Zaragoza, Spain.

A Stellantis spokesman confirmed the figures, explaining that direct manufacturing prices included labor; amortization of R&D, tooling and plant structural prices; and power use.

Three business specialists consulted by ANE for this text mentioned direct manufacturing prices characterize about 20 % of the entire manufacturing value of a quantity mannequin, and as much as 35 % for low-volume premium and luxurious fashions. Materials accounts for the rest.

Tavares reassured Italian unions that labor prices aren’t the primary challenge, noting that they’re greater at PSA vegetation in France, however the direct manufacturing prices he cited added to worries about the way forward for the Grugliasco plant, a union supply mentioned.

“We really feel that it might be very tough to regain sufficient competitivity in Grugliasco, given such a large hole to shut not solely on French vegetation, however even to close by Mirafiori,” the supply mentioned.

FCA thought of Grugliasco, a former Carrozzeria Bertone plant that it purchased in 2009, as a part of a single manufacturing hub with Mirafiori, which is about 3.5 miles away. That would make it simpler to shut Grugliasco and transfer employees to the Mirafiori plant. FCA had moved Maserati employees between the 2 vegetation in accordance with mannequin demand for years.

Grugliasco employs 1,149 assembly-line employees and Mirafiori 2,766, in accordance with figures from the FIM-CISL union.

Tavares’s message to the employees is that future investments in former FCA vegetation in Italy must be “right-sized” to enhance competitiveness – and never lose future mannequin allocations to different Stellantis vegetation throughout Europe.

Trade specialists say amortization of R&D, tooling and plant structural prices add as much as about 15 % of complete manufacturing prices per unit for a particular mannequin.

These prices don’t fluctuate with the manufacturing quantity.

“In case you construct half of the quantity deliberate for a mannequin, the burden of these prices doubles” on every automobile bought, an business government who requested to not be quoted by identify informed ANE. “In case you construct a fourth (of the deliberate quantity), they quadruple.”

FCA invested 500 million euros on the Grugliasco plant to launch the Quattroporte in 2012 and the Ghibli a 12 months later. Most put in capability was about 30,000 items yearly on two shifts a day, and mixed manufacturing of the 2 fashions peaked at 36,100 in 2014, in accordance with FIM-CISL figures. However complete manufacturing was simply 6,900 in 2019 and fell additional to six,676 final 12 months.

Then in 2014 FCA invested a further 300 million euros on the Mirafiori advanced to put in a brand new manufacturing line, together with a paint store, devoted to the Maserati Levante crossover. The Levante, which shares its structure with the Quattroporte and Ghibli, had a very good begin, with manufacturing peaking at 33,960 in 2017.

In response to union figures, complete Maserati manufacturing was 17,694 final 12 months, with 11,018 Levantes at Mirafiori and the remainder Quattroportes and Ghiblis at Grugliasco.

The Mirafiori advanced was one of many world’s largest auto vegetation when it was inaugurated in 1939 by Fiat founder Giovanni Agnelli and the Italian fascist chief Benito Mussolini. At its peak, greater than 50,000 folks labored at Mirafiori. By 1997, 26,500 employees constructed 463,000 autos.

It now employs a complete of 10,000 manufacturing employees and seven,000 workplace employees, primarily in advertising and marketing and gross sales, R&D and administration. It homes the Levante and New 500 manufacturing strains, a stamping facility, a powertrain plant and most of Stellantis’ Italian administrative and engineering employees. 

Final 12 months Mirafiori produced 30,026 autos, in accordance with the FIM union, of which 19,008 have been Fiat New 500s and the remainder Levantes.

Tavares has visited different Stellantis vegetation in Italy just lately, and a union supply mentioned he was impressed by a degree of automation at Cassino and Melfi that was significantly greater than at comparable former PSA vegetation.

Rising manufacturing facility automation was a method put in place within the mid-Eighties at FCA’s predecessor, Fiat Auto, as a response to conflicts with unions within the earlier decade, which peaked when employees occupied the Mirafiori plant for 35 days in October 1980.

The concept was to weaken dependence on employees – and their contractual energy — by decreasing the variety of direct jobs. The Melfi plant, which opened in 1993, employed 8,000 folks and 340 robots to construct as much as 400,000 items a 12 months. In distinction the Rivalta plant close to Turin that was opened in 1967 (and is now closed) wanted nearly 18,000 folks — and nearly no robots — to construct 400,000 items a 12 months within the early Nineteen Seventies.

However seen one other means, the excessive degree of automation at these factories — one other type of overinvestment — is likely to be a barrier to decreasing prices. The preliminary, expensive funding must be amortized, and general flexibility is considerably decreased, as a result of people may be instructed to make issues in another way sooner that machines may be reprogrammed, the union supply mentioned.

Andrea Malan contributed reporting