Stellantis will hire engineers from India, Brazil and Morocco to cut costs

Stellantis has decided to source its technical staff from low-wage countries, including Morocco, India and Brazil. This strategic move aims to contain costs amid competitive pressure from Chinese electric vehicle manufacturers and a global slowdown in electric vehicle demand. The cost of hiring an engineer in these low-wage countries is around $55,000 per year, significantly lower than rates in traditional car hubs like Europe or the US, where costs can be up to five times higher.

Stellantis turns to engineers from India, Morocco and Brazil to cut costs

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The automotive industry is undergoing a significant transformation, with manufacturers around the world attempting to produce cheaper vehicles. This shift comes in response to declining demand for electric vehicles and the need to remain competitive against emerging Chinese players. Stellantis’ approach to cost management includes a focus on labor cost optimization, as highlighted by the CFO Natalie Knight.

Knight underlined the continued importance of cost discipline, especially in the area of ‚Äč‚Äčlabor, during the company’s recent earnings presentation. At the presentation, Stellantis shares fell 11.5%, marking the biggest drop in two years, amid concerns about slowing European demand and pressure on margins.

In its pursuit of cost-efficiency, Stellantis is not only trying to save money, but also increase its capabilities in critical areas such as software development, artificial intelligence and battery cell chemistry. The company’s global strategy includes significant layoffs in the tech sector at its U.S. headquarters in Auburn Hills, Michigan, while at the same time plans to expand its tech workforce in Brazil by approximately 500 jobs. However, this global redistribution of technical roles has led to some development challenges, such as problems with the steering system of the Smart Car platform this required the intervention of French and Italian engineers.

Stellantis’ global workforce strategy and cost-cutting measures have led to political controversy and union dissatisfaction, especially in Italy, France and the United States. The company is facing pressure from the Italian government and unions over job losses and working conditions. Also CEO Carlos Tavares’ The remuneration package has drawn criticism from several analysts, highlighting the perceived disconnect between executive pay and wider workforce challenges. This situation underlines the delicate balance Stellantis must maintain between operational efficiency, employee well-being and political considerations.