MILAN — Average production costs for cars in Italy are higher than in other countries where the automaker operates, such as France and Spain, Stellantis CEO Carlos Tavares told unions.
But Tavares also said the higher costs were not due to labor costs, according to two union sources.
Tavares was in Turin on Tuesday to meet local worker representatives at one the group’s factories.
Stellantis was formed in January through the merger of Fiat Chrysler Automobiles and Peugeot maker PSA Group.
A union source, who attended the meeting, said Tavares told workers he wanted to reduce the additional costs Stellantis was now paying to produce cars in Italy, compared to similar vehicles built in PSA factories in France and Spain.
Tavares did not give details about what was causing the higher costs, though he said they were not attributable to wages, the source added.
A second source confirmed the CEO’s comments on labor costs, adding that he kept the discussion about costs at Italian facilities at a very general level.
FCA and PSA have targeted over 5 billion euros a year in savings from their merger, without closing any plants, and Tavares has also committed to not cutting jobs. He has also said that all Stellantis brands and plants would be given a chance to be profitable.
After PSA bought Opel from General Motors, Tavares benchmarked Opel’s plants against PSA facilities and said PSA factories appeared to be more productive. Tavares launched a cost-cutting drive that returned Opel to profit.
FCA has been struggling with overcapacity at its European factories, with utilization rates at 55 percent, according to LMC Automotive, the Detroit News reported. In comparison, PSA factories run at 68 percent utilization, LMC said.