Jeep, Dodge-maker Stellantis' profit slides as Detroit Three strikes bite

(L-R) United Auto Workers (U.A.W.) members Kaleb Delfine, Bryan Broecker, Michael Gatto and James Triplett picket exterior the Jeep Plant on September 18, 2023 in Toledo, Ohio.

Sarah Rice | Getty Images

Global auto big Stellantis on Thursday reported a ten% year-on-year fall in revenue within the second half of 2023, as six-week strikes on the so-called “Detroit Three” automakers hampered manufacturing within the group’s North American revenue epicenter.

Adjusted working earnings (AOI) got here in at 10.2 billion euros ($10.96 billion) for the July to December interval, down from 11.3 billion euros for a similar interval in 2022.

However, the earnings proved extra resilient to the impression of business motion than the market had anticipated, with AOI exceeding a forecast of 9.54 billion euros by analysts polled by Reuters. Stellantis shares jumped greater than 4% in morning commerce in Europe following the outcomes.

In North America, the group’s AOI margin fell 100 foundation factors year-on-year to fifteen.4%, which Stellantis mentioned in its earnings report was “due primarily to production disruptions and costs related to new labor agreements.”

Stellantis reported in late October that labor strikes by the United Auto Workers union, which ran for six weeks from Sept. 15 and in addition focused General Motors and Ford Motor, price the corporate $3.2 billion in income via October.

The firm, which owns family names together with Jeep, Dodge, Fiat Chrysler and Peugeot, reached an settlement with the UAW in early November that can see the corporate make investments $18.9 billion within the U.S. by 2028. Stellantis staff stateside ratified the deal, which incorporates no less than 25% wage will increase and the reopening of an idled plant in Illinois, on Nov. 17.

Second-half industrial free money flows have been down 24% from the identical interval final yr at 4.2 billion euros, whereas revenues have been additionally down barely at 91.2 billion euros.

Despite the hit from the six weeks of business motion, the auto big reported sturdy earnings for 2023 as a complete.

Net revenues got here in at 189.5 billion euros for the complete yr, up 6% from 2022, and consolidated cargo volumes rose 7%. Adjusted working earnings for 2023 was up 1% to 24.3 billion euros, whereas industrial free money flows elevated by 19% to 12.9 billion euros.

The world’s third-largest automaker by revenues on Thursday proposed a dividend to shareholders of 1.55 euros per widespread share, roughly a 16% improve from the earlier yr, and introduced a 2024 share buyback program of three billion euros.

“As we just passed the three-year mark since Stellantis’ inception, I warmly thank our teams who are executing at the highest levels and contributing greatly to our growth story, even in the strongest of headwinds,” Stellantis CEO Carlos Tavares mentioned in an announcement.

“Today’s record financial results are proof that we have become a new global leader in our industry and will remain rock solid as we look to a turbulent 2024.”