Stellantis NV is planning to cut approximately 3,500 hourly jobs in the United States as it approaches the expiration of a collective bargaining contract with the United Auto Workers later this fall.

Stellantis, the result of the 2021 merger between Fiat Chrysler Automobiles NV and France's PSA Group, is considering early retirement packages and buyout incentives for both skilled and production workers, as stated in a letter signed by Doug McIntosh, President of UAW Local 1264, representing a Stellantis stamping plant in Sterling Heights, Michigan.

CNBC reported that Jodi Tinson, a spokesperson for Stellantis based in the US, declined to provide any comments regarding the letter. Efforts to reach both the international UAW union and the local for comments were unsuccessful at the time.

The letter, dated Monday and shared on the social media page of UAW Local 1264, was previously reported by Automotive News.

Both the union and the company are making preparations for negotiations leading up to the deadline of September 14 for a new four-year contract.

In February, Carlos Tavares, the CEO of Stellantis, issued a warning that additional job cuts might be necessary due to the impact of electrification on the company's profit margins. 

As evidence, the automaker idled its Jeep plant in Belvidere, Illinois the same month, resulting in indefinite layoffs of approximately 1,350 workers. Stellantis also announced plans to cut up to 2,000 jobs in Italy.

“The cost of electrification is going to have an impact on the footprint of business that we are going to have around the world,” Tavares told reporters at a roundtable in Las Vegas in February.