Stellantis (NASDAQ:STLA) laid off 199 assembly workers at a Jeep plant represented by the United Auto Workers (UAW). It said more job cuts are coming.
Stellantis, a European car giant that merged with Fiat-Chrysler in 2021, also owns Peugeot, Citroen, and Vauxhall.
The company also said it would release its first-quarter results on April 30. STLA stock opened April 24 at about $25 per share, a market capitalization of nearly $75 billion.
An EV Pivot
Stellantis blames the layoffs on a changing auto market and the costs of transitioning to electric vehicles (EVs), which had just 7.15% of the U.S. market in the first quarter.
The job cuts are considered a blow to the United Auto Workers, which signed a contract with Stellantis just last year. The UAW called the layoffs “disgusting.”
With its European base, Stellantis has a much closer competitive relationship with Chinese companies than Ford (NYSE:F) or General Motors (NYSE:GM). It’s currently in court against one of its Chinese suppliers and is openly worried about Chinese companies opening assembly plants in Italy.
But Stellantis also recently announced a nearly $6 billion investment in South America, where it has over 23% of the market.
Stellantis draws less U.S. coverage than other car companies, but it’s more valuable than Ford or GM. Tipranks lists 21 analysts following it, with 14 telling investors to buy the stock and two saying sell. Fellow InvestorPlace contributor David Moadel is among those who like the stock for its value and yield.
Stellantis Layoffs: What Happens Next?
While most analysts are focusing on the American union aspects of this announcement, investors should take a different view. That is, they should consider how Stellantis’ problems and opportunities reflect the global car market.
On the date of publication, Dana Blankenhorn did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
