ROME — For the first time in two decades, workers within Italy’s automotive industry are participating in a national strike on Friday, accompanied by a large demonstration taking place in central Rome.
Initiated by the three leading unions in the sector, the strike reflects growing tensions between the far-right Italian government and Stellantis, the global automaker, which faces allegations of shifting its assembly operations to countries with lower labor costs.
As the world’s fourth largest automotive manufacturer, Stellantis is currently under increasing scrutiny regarding its future production strategies, as it grapples with fierce competition and financial challenges.
The multinational entity, formed in 2021 through the merger of Fiat-Chrysler and PSA Peugeot, has reported a significant decline in production at many of its Italian facilities during the first half of 2024. Over the past 17 years, it has cut its manufacturing output in Italy by almost 70%.
CEO Carlos Tavares recently pointed fingers at EU carbon emission regulations for inflating production costs, insinuating that the automaker might have to shutter some plants to compete with Chinese manufacturers. He acknowledged the potential for job reductions, emphasizing the necessity of enhanced state support to boost the demand for electric vehicles.
Following a recent profit warning, Stellantis has come under intense scrutiny, projecting a possible year-end loss reaching 10 billion euros (approximately $11.2 billion). This outlook has intensified its spotlight in the automotive sector.
Tavares is facing criticism from U.S. dealers and the United Auto Workers union due to lackluster financial results this year, attributed to an oversupply of high-priced vehicles on dealer lots. In his quest to reduce costs, Tavares has stalled factory openings, initiated layoffs of unionized workers, and proposed buyout options for salaried employees.
In September, Stellantis revealed plans to find a successor for Tavares, who is 66 years old, as part of an anticipated leadership transition. Although his five-year contract will expire in 2026, the company suggested there might be a possibility of him extending his tenure.