SummaryCompaniesSees 3 bln euro impact of N. America strikes on salesProfitability to be affected by less than 750 mln eurosNet revenue up 7% in Q3 to 45.1 bln eurosConsolidated shipments up 11% in Q3 to 1.427 mln units
MILAN, Oct 31 (Reuters) – Stellantis (STLAM.MI) on Tuesday played down the impact of strikes in North America over pay increases, saying they would not alter the automaker’s targets for profitability and cash.
Unions’ six-week campaign of coordinated strikes in the United States and Canada, which started last month and expanded in October, is ending this week after tentative agreements that won record salary increases for workers at the Detroit Three automakers.
Chief Financial Officer Natalie Knight said the strikes would cost Stellantis less than 750 million euros ($800 million) in terms of profitability, after a negative revenue impact of around 3 billion euros.
The group, which owns brands including Fiat, Peugeot, Jeep and Ram, confirmed its full year forecast for a double-digit margin on adjusted operating profit and positive industrial free cash flow.
“We believe we continue to be in a very strong position globally and in the U.S.,” she said in a media briefing. “We’re going to continue to be very focused on sales and profitability in all our regions.”
Knight, who started the job this summer, said the 750 million euro hit to profitability would be the smallest among the Detroit Three.
[1/4]A Stellantis employee works on the e-GMP electric engine assembly line at the carmaker Stellantis engines factory in Tremery near Metz, France, June 29, 2022. REUTERS/Gilles Guillaume Acquire Licensing Rights
Ford (F.N) has said it expects the strikes to reduce its 2023 adjusted operating profit by about $1.3 billion while GM (GM.N) sees an impact of no less that $1 billion.
“We’re looking at everything in terms of where should we approach (mitigation actions). And I think you will continue to hear more about that mitigation as we go forward,” Knight said.
Shares in the world’s third largest automaker were up 2.2% by 0950 GMT, outperforming Italy’s blue-chip index (.FTMIB).
The group’s inventory more than doubled in the first nine months of the year with the supply chain situation progressively normalising, Stellantis said, helping it respond to recent work stoppages.
Third-quarter revenue rose 7% to 45.1 billion euros on improved volumes and consistent pricing, partially offset by foreign exchange rates. It topped the 43.7 billion euros expected by analysts in a Reuters poll.
($1 = 0.9402 euros)
Reporting by Giulio Piovaccari and Gilles Guillaume; editing Jason Neely, Kirsten Donovan
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