UAW strike trims $795M from Stellantis profits while revenue increases

Stellantis said it has been least affected by the prolonged UAW strikes against the Detroit 3 that have curbed output at certain North American plants.

The company's pre-tax operating profit was damaged by less than 750 million euros ($795 million) during the strikes, Stellantis said on Tuesday. The strike cut revenue by about 3 billion euros ($3.2 billion).

Still, third-quarter revenue rose 7 percent to 45.1 billion euros ($47.8 billion), the company said in a statement.

The increase was mainly due to higher volumes, stable pricing, improving logistics and robust demand for models such as the electric Jeep Avenger but was partially offset by foreign exchange rates, Stellantis said.

Consolidated shipments rose 11 percent in the quarter to 1.48 million vehicles.

CFO Natalie Knight, who started the job in the summer, said on a media call that the 750 million euro impact on profitability from the strikes was the smallest among the Detroit 3.

“On the one hand, the U.S. market is very important to us, but it's a smaller piece of our overall business than what you see from our U.S. competitors,” Knight said. “And it's a place where we start with a very high and healthy profitability level.”

Knight said Stellantis workers can expect a ratification bonus “in the same order of magnitude” as Ford Motor Co., which is offering $5,000 in its tentative agreement.

Looking ahead, Knight gave a timeline on the company’s EV plans in 2024.

Knight said the electric Dodge Charger and midsize Jeep Wagoneer S will come around mid-year. The Wrangler-inspired Jeep Recon EV will come at the end of next year along with the Ram 1500 REV.

Stellantis has canceled plans for U.S. events including the CES consumer-trade show in January and will continue to cut costs to make up for the strike hit, Knight said.

The UAW's unprecedented six-week campaign of coordinated strikes in the U.S., which started last month and expanded in October, are ending this week after tentative agreements that won record salary increases for workers at the Detroit 3 automakers.

Stellantis and its Canadian union reached a tentative agreement on Monday on a new contract to end a one-day strike, two days after the company settled a long walkout with the UAW in the U.S. The latter deal will bring the top wage to over $42 an hour by April 2028.

Growth outlook

Presenting its third-quarter sales results, Stellantis on Tuesday confirmed its full-year guidance for a double-digit margin on adjusted operating profit and positive industrial free cash flow.

The company raised its industry growth outlooks for markets including North America and Europe. It lowered the outlook in South America.

"We believe we continue to be in a very strong position globally and in the U.S.," Knight said.

Stellantis has been expanding its lineup of electric vehicles as automakers battle to retain mass-market buyers, who have seen their spending power diminished by inflation.

Its Citroen brand started taking reservations this month for the new electric e-C3 starting at 23,300 euros, making it the least-expensive EV produced in Europe.

The automaker's EV sales climbed 37 percent in the third quarter.

Stellantis this month struck a deal to buy a stake in Chinese EV manufacturer Zhejiang Leapmotor Technologies to address falling sales in the world's biggest auto market. The manufacturer will also have a controlling stake in a joint venture that will allow it to build and sell some Leapmotor cars outside China.

Stellantis said it bought back 500 million euros in shares during the third quarter and expects to complete its 1.5 billion euro share buyback program in the current quarter.

Vince Bond Jr., Reuters and Bloomberg contributed to this report