Stellantis Plans $10 Billion in US Investments, Reports Say
Company Said to Be Focused on Jeep, Dodge and Possibly Chrysler Brands
[Stay on top of transportation news: .]
Stellantis NV is planning to invest about $10 billion in the U.S. as the troubled maker of Jeep sport utility vehicles and Ram pickups refocuses on the market that’s pivotal to its profits, according to people familiar with the situation.
The carmaker may announce in the coming weeks about $5 billion in fresh money on top of a similar amount earmarked earlier in the year, said the people, who asked not to be identified discussing private information.
The investments over several years could be funneled into plants — for reopenings, hiring and new models — in states including Illinois and Michigan, the people said.
Stellantis is focused on reclaiming the past success of the Jeep brand and considering fresh investment into Dodge, which could result in a new Dodge V8 muscle car, and possibly even the Chrysler brand in the long term, some of the people said. Talks are ongoing, no final decision has been made and the amount and targeted projects could still change, the people said.
Dz
The new spending reflects efforts by CEO Antonio Filosa, who was appointed to the top job in May, to recalibrate investments across regions, the people said. Under former CEO Carlos Tavares, Stellantis pushed aggressively to shift production and engineering operations to lower-cost countries like Mexico. He also invested heavily in Europe, where car demand and profitability is challenged, in the years after the group’s 2021 creation.
“As part of the preparations for the company’s strategy update and capital markets day next year, the CEO is leading a thorough evaluation of all future investments. This process is ongoing,” a media representative said in emailed comments, declining to elaborate further.
Stellantis’ Milan-listed shares rose as much as 3% on Oct. 6. The stock has declined 28% this year.
Currying Favor
Stellantis’ actions would mirror those of companies across industries unveiling big investment plans in the world’s biggest economy to curry favor with President Donald Trump and help mitigate the impact of tariffs. South Korea’s Hyundai Motor Group in August said it would increase its investment in the U.S. by $5 billion to $26 billion through 2028, and several major European pharmaceutical companies have also pledged billions of dollars of new spending.
READ MORE:GM, Ford Balk at Stellantis Request for Truck Tariff Waiver
The money may also help make good on a pledge by Chairman John Elkann, who has met Trump previously to discuss American investments, to manufacture a new midsize pickup vehicle at its idled plant in Belvidere, Ill., where the company has committed to return around 1,500 employees to work. Such a move could help appease the United Auto Workers union, who have held previous talks on the matter with Stellantis.
Stellantis is preparing the announcement while it has been lobbying the administration in recent days to waive or soften a possible 25% tariff that could otherwise hit medium-duty Ram pickups the company makes in Mexico.
“The political environment cannot be ignored,” Michael Foundoukidis, an equity analyst at Oddo BHF, wrote in a note to clients. “This could be seen as new evidence that the CEO is willing to earmark the majority of Stellantis’ investments in the coming years for North America rather than Europe, acknowledging that earnings rebound prospects seem more limited in Europe.”
Share Losses
Filosa, a veteran of Stellantis’ predecessor company Fiat Chrysler Automobiles, is struggling to stabilize a group that’s suffered steep market share losses in the U.S. and Europe following a series of strategic missteps under Tavares. He’s also trying to navigate the fallout from Trump’s tariffs, which are reshaping the global automotive landscape.
Some of those efforts are starting to pay off, with a gain in third-quarter U.S. deliveries.
The new CEO has started scrapping some European investments, withdrawing support from a joint hydrogen fuel cell venture with Michelin and Forvia SE. Stellantis also is mulling a sale of its Free2move car-sharing business, Bloomberg reported. Earlier this year, the automaker hired McKinsey & Co. for strategic advice on Maserati and Alfa Romeo. It has repeatedly denied any plans to sell Maserati.
Want more news? Listen to today's daily briefing above or go here for more info
The increased U.S. focus is alarming unions in Europe, where the owner of brands including Fiat and Peugeot suffers from manufacturing overcapacity. Like its rivals, Stellantis is increasingly contending with Chinese manufacturers led by BYD Co. expanding in the region with competitively priced cars.
Stellantis is temporarily pausing production at eight of its plants in Europe amid lagging demand for models including the Alfa Romeo Tonale sport utility vehicle and Fiat Panda city car. It’s among the major manufacturers most exposed to the deepening political crisis in France, where Prime Minister Sebastien Lecornu resigned Oct. 6 just after President Emmanuel Macron named a new Cabinet.
Filosa is scheduled to meet Italian labor union representatives on Oct. 20 as worries about possible plant closings mount. The company presented plans to boost production in Italy late last year.
Written by Aaron Kirchfeld, Albertina Torsoli and Gabrielle Coppola
