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US carworker strikes cost Chrysler owner Stellantis €3bn in lost revenues, the carmaker said on Tuesday, as it reported a rise in third-quarter sales.
Stellantis’s finance chief Natalie Knight estimated the hit to profitability from the six weeks of strikes over pay at “under €750mn”. This was the smallest impact among the Big Three carmakers in Detroit, which also include General Motors and Ford, she said.
“We have double the profitability [compared with others] so we started in a good place,” Knight said.
The group did not detail its operating earnings for the third quarter. It said revenues rose 7 per cent to €45.1bn in the third quarter, beating analysts’ expectations in a Reuters poll.
The company has reached a tentative deal with the United Auto Workers and Unifor unions, as have Ford and GM, after the first-ever co-ordinated walkout at the three largest US carmakers. The campaign has ended with salary increases.
Stellantis, which also produces European brands such as Peugeot and Fiat and owns the Jeep brand in the US, said demand was strong in its key markets, including in the US. In Europe, Spain and the UK, Stellantis performed particularly well, said Knight, adding that the group’s global presence had helped mitigate the impact of the strikes.
Like its rivals, Stellantis has been making a big push into electric cars. It said sales of battery-powered vehicles were up 37 per cent in the third quarter compared with a year earlier.
The group is aiming to find cost cuts where possible, including with suppliers, to reduce production costs and bring more affordable electric cars to market.
Last week it said it was investing €1.5bn in a stake in Chinese electric car start-up Leapmotor, in a renewed attempt to crack the local market but also to export China-made vehicles elsewhere.
Stellantis cut costs to offset the impact of the US strikes, including cancelling its appearance at events such as the Consumer Electronics Show in Las Vegas next January.
Ford said last week that the strike had cost it $1.3bn in operating earnings, while GM has told analysts it was costing the company $200mn a week, reaching $800mn in earnings before interest and taxes.
Stellantis confirmed its guidance for a double-digit margin on adjusted operating profit for 2023, and positive industrial free cash flow. It also said a €1.5bn share buyback programme was on track. The group’s Milan-listed shares were up 2.4 per cent by mid-morning on Tuesday.
Knight said supply chain problems that had held back deliveries in Europe had now largely dissipated. Stellantis’s shipments of cars were up 11 per cent in the third quarter to 1.4mn vehicles.