Get 40% Off
⚠ Earnings Alert! Which stocks are poised to surge?
See the stocks on our ProPicks radar. These strategies gained 19.7% year-to-date.
Unlock full list

Stellantis criticised by unions in France over furlough scheme to cushion chip shortage

Published 28/09/2021, 16:50
Updated 28/09/2021, 17:11
© Reuters. FILE PHOTO: A Stellantis sign is seen outside the company's headquarters in Auburn Hills, Michigan, U.S., June 10, 2021.   REUTERS/Rebecca Cook

By Gilles Guillaume

PARIS (Reuters) - Two leading trade unions at Stellantis on Tuesday criticised the way the carmaker is implementing a furlough scheme aimed at mitigating the impact of a fall in output brought on by a global chip shortage.

Stellantis and other carmakers have been hit by a series of supply chain disruptions during the COVID-19 pandemic, including chips which are key components in car manufacturing. Stellantis extended production halts at several European plants in late August.

The French furlough deal, agreed by four unions at Stellantis, enables the company to reduce the number of hours worked by staff affected by the chip shortage. The state reimburses the company for a portion of the lost hours, allowing workers to receive most of their salary on the condition they are re-trained and not laid off.

After a regular monthly meeting with management on Tuesday union representatives said too many staff were being put on the furlough scheme.

Anh-Quan Nguyen, a representative of white-collar union CFE-CGC union, said his union was concerned that France's relatively generous furlough terms meant a disproportionate number of workers were being put on partial leave compared with other Stellantis operations outside France.

"White collar workers are having to go into partial unemployment even when there is plenty of work to do. It makes no sense," Anh-Quan Nguyen, told Reuters.

Another union, the CFDT, said the company had failed to offer a sufficiently developed options for training opportunities.

Force Ouvriere, another union which agreed the furlough deal, which is the largest union inside Stellantis, said it was on alert for signs the company was furloughing too many workers whose roles were not directly linked to production.

A Stellantis spokeswoman, responding to the CFE-CGC complaint, said the partial unemployment arrangements were not limited to assembly lines.

"The whole company is involved in ... the objective of ensuring sustainability in the context of the semiconductor crisis, electrification and compliance with CO2 regulations," she said.

Stellantis said there were no similar furlough schemes in place within the group elsewhere in Europe.

Stellantis, created by the merger between PSA and FCA, this summer forecast it would produce 1.4 million fewer vehicles this year because of the chip shortage.

(This story corrects to add dropped "in France" to headline)

In France, under the furlough scheme workers give up on average one working day a week.

© Reuters. FILE PHOTO: A Stellantis sign is seen outside the company's headquarters in Auburn Hills, Michigan, U.S., June 10, 2021.   REUTERS/Rebecca Cook

Workers and their supervisors receive 84% if their net salary, with the state paying Stellantis an allowance corresponding to 60% of a worker's gross salary for the furloughed days.

Stellantis and the unions agreed the furlough scheme for an initial period of up to six months, though the agreement can be extended for three more years.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.