Stellantis Extends Italy Plant Holiday Plan Due to Weak Demand and Tariff

According to a Reuters report, on August 25, Stellantis reached an agreement with labor unions. Due to weak market prospects, Stellantis may implement reduced working hours for more than 1,800 employees at its Termoli plant in southern Italy.

Jeep Compass; Image source: Stellantis

The Italian Federation of Metalworkers (UILM) involved in this agreement stated that the impact of U.S. tariffs was also one of the factors leading to the agreement.

The plan will take effect on September 1 and last for 12 months. According to the agreement, during the validity period, Stellantis may arrange for employees at the Termoli plant to take leave for up to 80% of their total contractual working hours. This plan will replace a previous scheme that expires this month, which only involved around 900 employees.

A Stellantis spokesperson stated that the above agreement was signed on August 25, but did not disclose further details. It is reported that the Termoli plant in southern Italy mainly produces gasoline engines for Stellantis.

Francesco Guida of UILM stated that the demand in the automotive market, especially in the European market, is weak, and coupled with the fact that the launch of new models and new components still requires time, the prospects for Stellantis' Termoli plant are full of uncertainty.

Francesco Guida added that an engine produced at Stellantis' Termoli plant (with approximately 500 employees involved in its production process) had previously been exported to the United States for assembly in the locally manufactured Jeep Compass SUV. However, this engine has now been included in the tariff range imposed by former U.S. President Trump. He stated, "This will definitely impact the production activities at the Termoli plant."

Earlier this year, Stellantis designated the Termoli plant to produce dual-clutch transmissions used in hybrid vehicles, but the related production plans will not commence until next year.

Furthermore, the battery manufacturer ACC (Automotive Cells Company) had planned to develop the Termoli plant as one of its three major electric vehicle battery production centers in Europe, but this plan was officially suspended last year. Stellantis is one of the main shareholders of ACC.