Jeep, Dodge-maker Stellantis' profit slides as Detroit Three strikes bite

Global auto giant Stellantis on Thursday reported a 10% year-on-year fall in profit in the second half of 2023, as six-week strikes at the so-called Detroit Three automakers hampered production in the group's North American profit epicenter.

Adjusted operating income came in at 10.2 billion euros ($10.96 billion) for the July-to-December period, down from 11.3 billion euros for the same period in 2022.

However, the earnings proved more resilient to the impact of industrial action than the market had expected, with AOI exceeding a forecast of 9.54 billion euros by analysts polled by Reuters. Stellantis shares provisionally closed around 5.7% higher in Europe.

In North America, the group's AOI margin fell 100 basis points year on year to 15.4%, which Stellantis said in its earnings report was "due primarily to production disruptions and costs related to new labor agreements."

Stellantis reported in late October that labor strikes by the United Auto Workers union, which ran for six weeks from Sept. 15 and also targeted General Motors and Ford Motor, cost the company $3.2 billion in revenue through October.

The company, which owns household names including Jeep, Dodge, Fiat, Chrysler and Peugeot, reached an agreement with the UAW in late October that will see the company invest $18.9 billion in the U.S. by 2028. Stellantis workers stateside ratified the deal, which includes at least 25% wage increases and the reopening of an idled plant in Illinois, on Nov. 17.

Aside from the UAW strike, CEO Carlos Tavares on Thursday admitted Stellantis' U.S. operations were not "stellar in 2023."

The company was the only major automaker to report a decline in U.S. sales last year; its market share dropped below 10%; and Hyundai, including Kia,