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Auto industry’s transition to electric is changing its approach to staffing

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The Ford company logo on a sign above one of its plants.

Ford decided to offer "underperforming" white-collar workers the option of undergoing a special review process or leaving with severance. Scott Olson/Getty Images

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A whole lot of rightsizing is going on at the so-called Big 3 U.S. automakers: Ford, GM and Stellantis, the parent company of Chrysler and Jeep.

Analysts say buyouts at Stellantis, severance offers at Ford and a more conservative approach to hiring at GM are part of a bigger shift that’s playing out in the auto industry.

New cars and trucks are designed, manufactured and marketed by people. Ford’s CEO, Jim Farley, has said his company has too many of them.

“Usually you don’t say that publicly,” said Morningstar analyst David Whiston, who was surprised by Ford’s recent decision to offer white-collar workers deemed underperforming the option to go through a special review — which the company calls a “performance improvement process” — or leave with severance. But change is happening across the industry.

“Companies are battling the transition to a new type of propulsion, the kind of transition that really hasn’t happened since the early 20th century,” Whiston said.

That transition pertains to shifting away from internal combustion engines and focusing on electric vehicles. Ford’s plans affect a small subset of people with eight or more years with the company, per spokesperson Marisa Bradley.

“A key element of delivering the broader transformation is to have the best talent possible working on the business,” she said.

In August, Ford announced it would cut 3,000 jobs in an attempt to lower costs. GM has limited hiring to what it calls “critical needs and positions that support growth.” Stellantis is offering voluntary buyouts to some of its 13,000 salaried U.S. workers. And, as with Ford, the offer applies to company veterans — in this case, those 55 and older with at least 10 years there.

That comes with a cost, said Brian Finkelmeyer, senior director of new car solutions at Cox Automotive. “A lot of tribal knowledge walks out the door when you lose those people.”

But buyouts and selective hiring across the Big 3 now don’t necessarily mean widespread layoffs later.

“Some of the people that they already have can make that transition with them,” said S&P Global Mobility analyst Stephanie Brinley.

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