Despite UAW strike costing billions, Stellantis reports net revenue up
Work stoppages caused by striking hourly workers seeking higher wages cut into net revenue for Stellantis N.V. by an estimated $3.2 billion through October, according to the company's third quarter "shipments and revenues" report released Tuesday.
The financial report didn't specify how much of the $3.2 billion cost in September and October was attributed to the UAW strike, which lasted 44 days. Stellantis reached a tentative agreement on Saturday with the UAW. On Monday, Stellantis reached a tentative agreement with Unifor workers in Canada after a one-day strike.
However, the automaker that owns Jeep, Chrysler, Ram, Dodge and Fiat still reported a 7% increase in net revenue from the period a year ago to $48.1 billion for the months of July, August and September. The company credited more shipments, more inventory, better supply chain access and pricing partially offset by foreign exchange rates, according to the company's report.
"We are clearly on track," Natalie Knight, the new chief financial officer at Stellantis, said during an investor call on Tuesday.
She declined to discuss the tentative contract with the UAW, waiting for its leadership to communicate details as part of the ratification process. But Knight did say the company navigated union negotiations, and the strike, from a "healthy" position compared to its Detroit competitors because sales are growing all over the world and less dependent on the U.S. market.
In addition, global battery electric vehicle sales for Stellantis climbed 37% from a year ago, mostly driven by the Jeep Avenger and commercial vehicles led by the Citroën ë-Berlingo. The Peugeot E-208, Fiat New 500e and Citroën Ami also sold well, the company said.
The company repurchased $533 million in shares during the third quarter, in addition to the nearly $1.3 billion in shares during the first nine months of this year. Stellantis is planning to complete a total of nearly $1.6 billion in its 2023 Share Buyback Program by the end of the year.
Knight said the company is the industry leader in adjusted operating income, adjusted operating income margin and industrial free cash flows.
"We are focused on maintaining our momentum by delivering industry-leading profitability and cash flows, addressing critical near term industry challenges, and continuing our electrification and technology transformation," she said in the news release.
Stellantis noted the opening of its state-of-the-art Battery Technology Center at the Mirafiori complex in Turin, Italy. The site is where Stellantis will design, develop and test battery packs, modules, high-voltage cells, and software to power upcoming Stellantis brand vehicles.
The automaker also noted its plans for a sixth gigafactory globally to support its electrification goal to secure more battery capacity; it will be the second facility to be built in the U.S. with Samsung SDI. The $3.2 billion project is slated for Kokomo, Indiana.
"To accelerate the transition to electric vehicles in North America," Stellantis is joining General Motors, BMW, Honda, Hyundai, Kia and Mercedes-Benz Group in the plan to install at least 30,000 high-powered charge points, the company noted in its financial report.
The company also touted its plan to manage and secure the long-term supply of microchips through "agreements with chip makers for critical semiconductors, purchase of mission-critical parts, and full visibility of future chip needs."
Knight spotlighted to investors the growth in South America, the Middle East and Africa while highlighting Turkey and Algeria. She also noted major gains made by Stellantis in Europe, which included overtaking Tesla in electric vehicle sales.
Stellantis is building and selling electric vehicles in Europe, Knight said, and focusing on affordability. That has been key to the company's strategy, she said.
Stellantis Q3 shipment highlights included:
Up 7%, led by Chrysler, especially Pacifica plug-in hybrid electric vehicle, which more than doubled year over year; Dodge and Ram improved, Jeep was down due to the discontinued current generation Cherokee and scheduled downtime of the Compass, partially offset by Grand Cherokee, which nearly doubled. Net revenues were up 2% primarily due to higher volume, strong prices and product mix.
Up 11% in Europe, up 7% in South America, down 33% in China, India and Asia Pacific
Net revenue in North America was $22.94 million in the third quarter, up from $22.45 million a year ago. Year to date, net revenue in North America is $71.87 million, up from $67.68 million in 2022.
The company said its 2023 industry outlook includes positive growth in North America and globally. It also confirmed its fiscal 2023 guidance of double-digit adjusted operating income margin and industrial free cash flows.
Stellantis workers after 5 weeks on UAW strike: 'Enough is enough. Let's get it done.'
Contact Phoebe Wall Howard: 313-618-1034 or phoward@freepress.com. Follow her on Twitter @phoebesaid.
This article originally appeared on Detroit Free Press: UAW strike costs billions but Stellantis reports net revenue is up
