© Reuters. FILE PHOTO: A flag with the logo of Stellantis is seen at the company’s corporate office building in Saint-Quentin-en-Yvelines near Paris, France, May 5, 2021. REUTERS/Gonzalo Fuentes/File Photo
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MILAN (Reuters) -Stellantis 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 (NYSE:) 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 (OTC:), 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.
Ford (NYSE:) has said it expects the strikes to reduce its 2023 adjusted operating profit by about $1.3 billion while GM 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.
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)
