Stellantis, the automotive giant based in Italy, is grappling with a significant production crisis. On October 18, major Italian unions have called for a one-day strike at Stellantis and its local suppliers to protest the declining vehicle production in the country, as reported by Automotive News.
According to FIM-CISL, production at Stellantis' Italian facilities fell by 25% in the first half of the year. Union representative Rocco Palombella described the situation as 'bad, very bad' during a press conference alongside other major metalworker unions.
Current forecasts predict that Stellantis will produce just over 500,000 vehicles in Italy this year, a steep decline from 751,000 units in the previous year. Operations at Stellantis' Italian plants have been frequently halted due to poor market demand, particularly for electric vehicles.
Italian politicians and unions are concerned about further job cuts in the automotive sector. Before the merger of Fiat Chrysler and the French PSA Group into Stellantis, over 51,000 people were employed in Italian plants; now, that number has dropped to about 43,000. FIM-CISL fears that the ongoing crisis could jeopardize 12,000 jobs at Stellantis, with an equal or greater number potentially lost in the supply chain.
The nationalist government under Prime Minister Giorgia Meloni has been at odds with Stellantis for months, accusing the automaker of neglecting its historical production sites in Italy. The government is in discussions with Stellantis, the only major automaker in the country, to increase Italian production to 1 million units per year by the end of the decade, but no agreement has been reached so far.
Just days prior, Adolfo Urso, Minister for Enterprises and 'Made in Italy', made good on a threat issued months ago: if Stellantis does not provide a concrete timeline for the construction of its battery cell factory in Termoli, the EU funds earmarked for the project will be reallocated. Since the joint venture ACC, which includes Stellantis, German automaker Mercedes, and energy company TotalEnergies, failed to meet this demand, Urso has withdrawn the commitment and will now allocate the more than 220 million euros from EU funds to other projects.
The ministry's website states that the funds intended for Termoli will be redirected to other initiatives focused on the energy transition, reinforcing the government's intention not to rely solely on Stellantis for Italy's future. Meloni has accused Stellantis of shifting parts of its production to low-wage countries and turning its back on Italy.
Stellantis and ACC attributed their hesitance to uncertainties regarding which technology to adopt for cell production. In June, ACC announced a 'pause' in the establishment of its battery factories in both Italy and Germany to adjust its strategy in light of rapid developments in electric mobility. The joint venture plans to focus on developing cheaper electric vehicle batteries based on lithium iron phosphate (LFP) cells to meet the rising demand for affordable electric cars.
However, the battery factory in Termoli is not entirely off the table. Minister Urso stated that domestic state funding could be provided if ACC presents a new industrial plan for Termoli at a later date. In a press release, ACC expressed hope to resume construction in the first half of 2025, once the technical and market-related obstacles hindering the project have been overcome. 'As soon as electric vehicle sales in Europe increase, and I see that I need more capacity, I will trigger the investment in the two plants in Germany and Italy,' said CEO Carlos Tavares.