Global auto giant Stellantis (NYSE:STLA) 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 (AOI) 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 jumped more than 4% in morning trade in Europe following the results.
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 (NYSE:GM) and Ford Motor (NYSE:F) , 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.
STLA shares jumped $1.22, or 5%, to $25.60.
