Car giant Stellantis says UAW strike cost it $3.2BN in lost revenue and $800M in profits

Auto giant Stellantis said the strike by US auto workers had cost the company $3.2 billion in lost sales and $800 million in profits on Tuesday.

The maker of Jeep and Dodge reported that the financial loss resulting from the 44-day strike involving 46,000 workers amounted to approximately three billion euros, equivalent to $3.2 billion in revenue.

The company’s profit loss was less than €750 million, equivalent to about $800 million, as Chief Financial Officer Natalie Knight stated on a call with reporters.

The historic six-week strike against Detroit’s three major automakers ended Monday after General Motors and the United Auto Workers union reached a tentative agreement to join Ford and Stellantis.

The impact on Stellantis is the least compared to Ford and GM, which reported $1.3 billion and $800 million in profit losses, respectively.

The maker of Jeep and Dodge reported a $3.2 billion loss in sales and a profit loss of just under $800 million during a call with reporters on Tuesday.

The historic six-week strike against Detroit’s three major automakers ended Monday after General Motors and the United Auto Workers union reached a tentative agreement to join Ford and Stellantis.

The impact on Stellantis is the least compared to Ford and GM, which reported $1.3 billion and $800 million in profit losses, respectively

“For us, we’re a big global company, so (North America) is part of the plan, but it’s very different than what it is for our competitors,” Knight said.

Despite the impact of the strike, the company reported an increase in sales and revenue for the July to September period – up 7 percent from the same quarter in 2022 to $48 billion. Vehicle shipments were up 11 percent over 2022, with more than 1.4 million vehicles.

The company said that despite the strike and costs associated with new labor contracts, it remains on track to achieve its annual profit target.

The UAW said Monday that the tentative contract with Stellantis includes a 25 percent increase in base wages by 2028, as well as cost-of-living adjustments that will cumulatively increase the top wage by 33 percent to more than $42 an hour.

“We look forward to welcoming our 43,000 associates back to work and resuming operations to serve our customers,” said Mark Stewart, Chief Operating Officer of Stellantis North America.

Since the strike on September 15, Stellantis had laid off more than 1,000 workers at the Toledo Machining Plant in Ohio and the Kokomo Transmission and Kokomo Casting facilities in Indiana.

UAW President Shawn Fain addressed workers outside the plant and handed out signs

President Joe Biden supported striking workers at a picket in Michigan in September as he urged them to “stick with it” to get “the significant raise you need.”

A week ago, nearly 7,000 workers walked out of Stellantis’ most profitable factory in a major escalation of the UAW strike. which halted production at the company’s 5 million-square-foot Sterling Heights factory in Michigan.

The strike came days after UAW President Shawn Fain said he had received a new offer from Stellantis — a 23 percent pay increase — but that more work needed to be done.

The UAW demands include a 40 percent increase.

Factory workers in the auto industry earned an average of $28 an hour, but top-tier workers who have worked at companies the longest take home about $33 an hour. The UAW demanded an end to the tiered system.

The UAW’s strategy of escalating, targeted strikes cost the Detroit Three and its suppliers billions of dollars in just over forty days.

Last week, General Motors said the strike was costing about $200 million a week in lost profits.

US President Joe Biden praised the provisional agreement on Monday. “I think it’s great,” Biden, who has touted himself as pro-union and supported the UAW, said when asked about the reported deal.