Carlos Tavares singled out the Sterling Heights Assembly Plant in Michigan that builds the automaker’s Ram pickups
- Stellantis’ CEO is singling out plants whose output needs repair before even leaving the factory
- The chief exec also noted several cost-cutting ideas are on the table for the automaker
- From reports Stateside, those measures include a voluntary buyout program, and perhaps layoffs
For those not in the know, a “direct run” rate is the proportion of vehicles that get built in a factory and then make it to the end of the assembly line without needing any quality-control rework, fixes, or touch-ups.
The impact of these quality gremlins on the production line cost money in numerous ways. Extra costs associated with paying people to fix cars which should have been built right in the first place are a concern, as are the potential creation of other quality issues brought on by these repairs. “When you are making a repair outside of the main line,” Tavares said, “you can always fix what you have to fix, but create another problem.”
Elsewhere, the company is now planning to reduce salaried headcount through a broad voluntary buyout, described as a “separation program.” It’s not all voluntary, though; according to reports, if not enough employees participate in the buyout, involuntary terminations could follow. Eligible employees will apparently be sent an email in mid-August.
It is worth noting the first part of this story (quality problems) can be at least partially fixed with more people working collaboratively with all hands at the factory level to address these issues. Chopping jobs will not provide that opportunity — it’s tough to cut one’s way to prosperity.
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