Carmaker Stellantis cuts forecasts amid industry collapse

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MILAN — Automaker Stellantis, the world’s fourth-largest automaker and Windsor’s largest private employer, lowered its earnings forecast on Monday, citing investments to turn around its U.S. operations amid a broader industry downturn and increased Chinese competition.

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Stellantis said it is accelerating efforts to turn things around in North America, including increasing dealer inventory levels to no more than 300,000 vehicles by the end of the year, instead of the first quarter of 2025 as previously planned.

The move comes as deliveries fell by 200,000 vehicles in the second half of this year compared with the previous year, twice the company’s forecast. The company will offer higher incentives for 2024 and older models.

In its earnings warning, Stellantis said it expected to end the year with negative cash flow of 5 billion to 10 billion euros ($5.6 billion to $11.2 billion), rather than positive.

The automaker, which was formed in 2021 through the merger of PSA Peugeot with Fiat Chrysler Automobiles, also lowered its operating profit margin forecast to 5.5%-7.0% instead of double digits.

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The struggling Jeep and Ram automaker is looking for a new CEO to replace Carlos Taveres, who has been under fire from U.S. dealers and the United Auto Workers union after dismal first-half financial results. The company presented the search as a normal leadership succession plan.

Stellantis is also under pressure in Italy, where it has one of its main shareholders, due to production cuts. Autoworkers announced a one-day strike on October 18.

The company said first-half net profits fell 48 percent compared to the same period last year. First-half sales in the United States fell nearly 16 percent, even as overall new vehicle sales rose 2.4 percent.

The Windsor Assembly Plant employs approximately 4,500 workers, making it by far the largest private sector employer in the city. It was unclear Monday how the potential global cuts would affect the Windsor assembly plant, if at all.

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Windsor workers recently had reason to be optimistic, albeit with some setbacks.

The United Autoworkers union filed unfair labor practices charges against Stellantis two weeks ago over a potential new Dodge product for its Windsor assembly plant.

The UAW is concerned that Stellantis plans to move production of the Dodge Durango or its successor overseas to its Windsor assembly plant in 2027.

The U.S. union argues that the company’s 2023 contract guarantees UAW workers will continue producing the three-row SUV – as well as any future generations of the Durango – at the Detroit assembly complex.

The Windsor Star first reported on Aug. 30 that Stellantis may produce the new Dodge product at its Windsor assembly plant, according to analyst Sam Fiorani, vice president of global vehicle forecasts at AutoForecast Solutions.

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The car company did not confirm any product attribution to either Windsor or its Detroit assembly plant.

Stellantis has previously said it would reduce its workforce. According to media reports, the company will lay off as many as 2,450 workers at the Warren Truck plant near Detroit when the automaker discontinues production of the Ram 1500 Classic truck.

The company also said it would lay off other employees “across its footprint,” including seasonal additional workers, but did not publicly provide a number or timeline.

According to last week’s Detroit Free Press, “Recent social media posts indicate that workers at many factories have either been told about the cuts or are preparing for them.”

— With files from the Windsor Star.

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