Stellantis at a Crossroads: Voluntary Redundancies and the Uncertain Future of Termoli Plant

The automotive industry’s transition to electric vehicles (EVs) has brought both opportunities and existential challenges for legacy manufacturers. Nowhere is this clearer than at Stellantis’ Termoli plant in Italy, where 200 voluntary redundancies have been proposed as part of a broader workforce restructuring. This move underscores the plant’s declining relevance in Stellantis’ evolving strategy—and raises critical questions about its future.

A Plant in Decline: Why the Cuts?

The Termoli facility, once a cornerstone of Fiat’s engine production, is facing existential threats. Key production lines for combustion engines—including the FIRE engine and Nettuno V6—have been shut down or phased out, reducing output and revenue. The redundancies, targeting older workers via early retirement programs, aim to “rejuvenate” the workforce while adapting to Stellantis’ pivot toward electrification. However, the plant’s role in this pivot remains shaky.

The Gigafactory Dilemma: A Missed Opportunity?

Stellantis had hoped to transform Termoli into an EV hub through the Automotive Cells Company (ACC) joint venture, which aimed to build a battery gigafactory. This project was central to Stellantis’ ambition to control EV battery production—a critical competitive advantage. However, soaring energy costs and weak EV demand in Europe have derailed these plans.

By late 2024, Stellantis CEO John Elkann admitted the Termoli gigafactory was “very difficult” to realize, with delays pushing its potential launch to late 2025 or beyond. Meanwhile, ACC’s joint venture partner, TotalEnergies, has signaled a preference for focusing resources on its existing French gigafactory. This shift leaves Termoli’s prospects hanging in limbo.

Financial Implications: Cost Cuts vs. Revenue Gaps

The voluntary redundancies will reduce labor costs, but they mask deeper financial vulnerabilities. Stellantis’ 2024 net profit fell 70% to €5.5 billion, while industrial free cash flow turned negative at €6 billion. The delayed gigafactory and shrinking workforce at Termoli exacerbate these pressures.

The plant’s planned eDCT transmission line—for hybrid vehicles—will employ just 300 workers by 2026, far fewer than the current 1,500 employees. This underutilization threatens to turn Termoli into a white elephant unless new projects materialize.

Labor and Political Risks: A Silent Disengagement

Unions accuse Stellantis of “silent disengagement”—a strategy of gradual cuts that erodes the plant’s viability. The cancellation of the €370 million ACC project and stalled investment in Termoli contrast sharply with Spain’s aggressive EV infrastructure spending (e.g., €4 billion for gigafactories).

Italy’s broader automotive workforce has shrunk from 55,000 to under 40,000 since Stellantis’ 2021 merger, reflecting a broader cost-cutting push. Yet without concrete plans to revive Termoli, its workforce could face further reductions post-2025.

Outlook: Hybrid Hopes and Structural Challenges

Stellantis’ pivot to hybrid vehicles—via the eDCT line—offers a stopgap. The plant will produce 300,000 transmissions annually starting in 2026, securing 300 jobs. However, this is insufficient to offset the loss of combustion engine work or justify the plant’s scale.

The ACC gigafactory’s fate remains pivotal. If canceled, Termoli’s survival hinges on hybrid production and potential new engine contracts. If revived, it could stabilize the plant’s future—but only if EV demand rebounds.

Conclusion: A Risky Gamble with Uncertain Returns

Stellantis’ Termoli plant is at a crossroads. The voluntary redundancies and workforce reductions aim to align costs with reduced production, but they also expose structural weaknesses:

1. Gigafactory Uncertainty: A delayed or canceled project leaves Termoli without a clear growth engine.
2. Hybrid Reliance: The eDCT line’s limited scale may not justify the plant’s size.
3. Financial Strain: Stellantis’ 2024 financials (€5.5B net profit, €6B cash burn) highlight the risks of underinvesting in high-growth areas.

Investors should monitor ACC’s decision by mid-2025 and Stellantis’ ability to secure new production mandates. Without these, Termoli risks becoming a symbol of the automotive industry’s turbulent transition—a blend of innovation and obsolescence.

In summary, Stellantis’ actions at Termoli reflect a high-stakes gamble. The redundancies buy time, but without decisive investments in EVs or hybrids, the plant’s future—and Stellantis’ broader competitiveness—remain in doubt.