Stellantis recorded a 21 percent decline in sales in the United States, one of the world’s most important markets, in the second quarter of 2024, ending up far behind competitors. Additionally, the company’s net profit fell by 48 percent in the first half, although the company remained profitable. Concerns were amplified by a series of significant executive departures and job cuts, including white-collar workers and factory workers at various plants. Among the measures taken, there is also a plan to eliminate a shift at the Warren Truck Assembly north of Detroit.
Stellantis incurs the wrath of the UAW union, ready to strike
CEO Carlos Tavares referred to the company’s “arrogance” in discussing some of the problems, indicating among other things the presence of production issues and excess inventory. The Portuguese manager also mentioned problems at a couple of plants in the United States, without being too specific. The company has not backed away from its forecast of double-digit adjusted operating margins for 2024, but Stellantis’ share price shows that the market is no longer so convinced, with the stock price falling to about $16 per share, compared to the peak of $29.40 in March 2024.
In recent days, UAW President Shawn Fain released a video pointing the finger at Stellantis and, in particular, at Carlos Tavares: “Something is wrong at Stellantis, but the problem isn’t the market, as General Motors and Ford sales are up. The problem is Carlos Tavares,” Fain said, highlighting Tavares’ compensation of $39.5 million in 2023 and accusing the company of price gouging. The union has also accused the company of “putting the brakes” on reopening the Belvidere assembly plant in Illinois, a key issue in contract negotiations during last year’s strikes.
The union has therefore declared that it is ready to file complaints about the Belvidere delays, with Stellantis having received more than $300 million from the U.S. government to resume operations, and that it will consider a national strike against the automotive Group. This situation ends up multiplying concerns about the group’s situation in North America, but it is expected that things will not improve in the short term.