Workers in Italy’s automotive sector are staging a national strike for the first time in two decades, with a significant demonstration taking place in Rome. The strike, organized by the sector’s three main unions, is occurring amidst escalating tensions between global automaker Stellantis and the Italian far-right government. The government has accused Stellantis of moving assembly plants to countries with lower production costs.
Stellantis, the world’s fourth-largest automaker, is facing mounting pressure to clarify its future production plans as it grapples with increased competition and financial challenges. Formed in 2021 from the merger of Fiat-Chrysler and PSA Peugeot, the multinational group experienced a substantial decline in output at most of its Italian plants in the first half of 2024. Over the past 17 years, the company has reduced its Italian production by nearly 70%.
CEO Carlos Tavares recently attributed rising production costs to EU carbon emission regulations, hinting at the possibility of closing some assembly plants to compete with Chinese manufacturers. Tavares also mentioned the potential for job cuts and emphasized the need for additional state incentives to boost demand for electric vehicles.
Stellantis, known for producing Jeep and Chrysler vehicles, has faced scrutiny following a profit warning indicating a projected loss of up to 10 billion euros ($11.2 billion) for the year. Tavares has come under criticism from U.S. dealers and the United Auto Workers union due to the company's poor financial performance, which was exacerbated by an oversupply of high-priced vehicles at dealerships. To reduce costs, Stellantis has implemented measures such as delaying factory openings, laying off union workers, and offering buyouts to salaried employees.
In September, the company announced its search for a successor to 66-year-old Tavares as part of a planned leadership transition. While Tavares' five-year contract was set to expire in 2026, there were indications that he might continue in his role beyond that timeframe.
