At CES in Las Vegas in early January, Stellantis CEO Carlos Tavares said the automaker is grappling with higher inflation on top of the cost of electrifying its lineup.
“Anywhere you introduce technology that is 40 per cent more expensive than the previous one, you need to work hard in improving your business model through fixed and variable costs,” he said.
“If the average transaction price increases because of the EV sales-mix increase, then you have risk that the total market shrinks.”
If sales sink, “We don’t need so many plants. Some unpopular decisions will have to be made,” Tavares said.
A few weeks later in Windsor, Ont., Mark Stewart, COO of Stellantis’ North American operations, said vehicle affordability is a big issue.
“We’re all very concerned about affordability of vehicles for our customers,” Stewart said in an interview Jan. 17 at the automaker’s minivan assembly plant.
As it develops EV technologies, Stellantis is working with its unions and supply base to lower production costs, he said.
“Because the last thing that we need are to have this great lineup of products that no one can afford.”
Unifor National President Lana Payne said she’s not spoiling for a fight. But cost-of-living adjustments and income-security protections, such as pensions, are likely to be among the top issues for the more than 22,000 hourly workers at Detroit Three assembly and powertrain plants in Canada.
“[Workers] want to make sure they’re not falling behind, so I suspect you’re going to see those kinds of very basic economic issues being some of the priorities that we’re going to see at bargaining in August,” Payne said.
Unifor will be coordinating its efforts with its UAW counterparts — the first time since the Canadian union launched in 2013 that the two labour organizations will be negotiating contracts in the same year.
The talks will be held against the backdrop of Detroit Three promises to spend billions on retooling Canadian plants to assemble EVs. While those investments signal a promising future for Canada’s auto manufacturing footprint, both union and management are navigating an industrial landscape in the throes of revolutionary change.
And 2023 bargaining could help determine how well automakers and their employees manage this once-in-a-century transformation.