The struggles facing Ford rival Stellantis are well documented to this point, as that particular automaker has been facing rising inventory levels, sinking profits, and a rather perturbed dealer network – not to mention the ire of the United Auto Workers (UAW) union. While it works to right the proverbial ship, Stellantis is mulling layoffs and other cost-cutting measures, but in the meantime, the automaker has also slashed its earnings forecast as well.
According to the Associated Press, Stellantis now expects to post a negative cash flow of somewhere between 5-10 billion euros ($5.6 billion to $11.2 billion USD) instead of a positive result by the end of 2024, and also dropped its operating profit margin guidance to between 5.5-7.0 percent, instead of double digits as previously expected. In the first half of 2024, the automaker’s net profits were down 48 percent year-over-year, with U.S. sales dipping by around 16 percent.
Stellantis plans to continue to shave inventory from dealer lots, as it currently has some of the highest levels of any brand in the U.S., which has drawn quite a lot of criticism from its dealer network in that country, coupled with the fact that the automaker has cut several popular products from its lineup as of late. Additionally, Stellantis will ramp up incentive spending in an effort to help reduce inventory and drive sales as it deals with a broad industry slump and increasing competition from Chinese companies.
As Ford Authority previously reported, Stellantis is offering a voluntary separation program to some of its salaried U.S. workforce from the vice president level down. There is no minimum service requirement involved in this process, but it’s currently unclear how many of the 11,000 salaried U.S. workers are eligible for the program at the moment, nor how many workers Stellantis is aiming to reduce its headcount by. The company is also facing unfair labor charges from the UAW amid allegations that it’s not adhering to terms set forth in the latest master contract agreement between the two as well.
Comments
Amazing watching so many companies in so many industries self destruct while pushing an agenda. The “top shareholders” write it off as a cost of doing business or marketing expense and the out of touch Boomer execs get to retire ultra wealthy.
What agenda? They’re not Disney. They just have unappealing products and too many holes in their lineup.
EVs. Hell, Tavares received a 10 million euro bonus from the board for meeting their EV milestones for the company. You know, the company that’s dying.
Well, you’re right about that! They jumped on the wrong bandwagon
Until Stellantis gets some decent vehicles out there with good reliability, they will continue to struggle. So So reliability with the outrageous prices they charge won’t cut it.
Stellantis key selling point was cheap, fun speed. Without that, they have no future in the US.
I’m not at all surprised this is happening at Stellantis. Vert early on following their announcement of going all electric within a couple of years, I thought “this isn’t going to end well! Lots of others said so too. But they went ahead anyway, even came up with “piping recorded exhaust sound into the speakers” LOL.
They need to stop making junk.
Not surprised. Stellantis is trying to run dodge like a euro brand. Dodge’s brand was “fast sporty cheap”, and that client base doesn’t like being told “now you get this rebadged Italian trashbox”. Or “you know that big V8 sedan you like? Now it’s an EV and costs more”.
They need to get their pricing under control. They got greedy during the times of shortages, and now they have to do 20% off MSRP incentives plus dealer price reductions to try to sell them. Dealers would LOVE to sell them, but they can’t because they don’t even have enough room to bring them down to a reasonable price.
Supposedly they’re going to unleash MASSIVE incentives to try to offload some inventory. We will see if that happens.