Will Stellantis Go the Way of British Leyland?

Join daily news updates from CleanTechnica on e-mail. Or follow us on Google News!

Is Stellantis circling the drain? Will it take the French and Italian economies with it? Gross sales are down throughout the conglomerate, roughly 11% YOY.

Bear with me, I must share a little bit of historical past and I’ll go away rather a lot out and attempt to simplify issues. Rather a lot has occurred within the final century and a half within the historical past of the auto. My expertise is with the UK and Australia. A few of our American readers would possibly love to do an analogous article on the US trade. Additionally notice that Dr Paul Wildman and I’ve printed on CleanTechnica concerning the points confronted by the German (VW) and Japanese (Toyota) auto industries. You’ll be able to examine that here and here.

On the flip of the twentieth century, horseless carriages had been the brand new new factor. In England, it was William Morris, Herbert Austin, and Frederick Wolseley, who had been setting the tempo. In Germany, it was Emil Jellinek (father of Mercedes Jellinek), Gottlieb Daimler, and Carl Benz. In France, it was Jean-Frederik Peugeot and Andre Citroen. The breeding of horses was slowed down, it was the age of the auto. Races had been held to show how briskly these machines may go and data had been set and damaged for hill climbs, endurance, and pace. Unusually, we’re nonetheless doing these items.

Individuals discovered new abilities and tailored previous ones. Engineers went from exterior combustion (steam engines) to inner combustion. Carriage makers tailored their designs to be pulled by an engine not a horse. Corporations had been began, folded, adsorbed, and remade. I drove a Wolseley for some time (2010–2022) and seemed into the historical past of the corporate. Sir Frederick Wolseley noticed the necessity for powered shearing instruments in Australia within the 1890’s, went again to England, and used the household firm to make the product. He made a fortune after which went into automobiles.

Stellar — Wolseley, a part of British Leyland. Picture courtesy of Majella Waterworth.

When working in England within the ’70s, I drove a Morris Oxford. It was the identical automotive as my Wolseley. There have been 10 fashions (MG, Riley, Morris, Austin, and so forth.), all with barely totally different trims and value factors, and designed for various demographics. Badge engineering. Once more, it seems to me that we now have manufacturers doing the identical factor. The joke within the ’70s was, “My doctor has ordered me to take a rest. So, I have applied for a job at British Leyland.” There was hubris, lack of innovation, and disrespect for the shopper. Sound acquainted?

Manufacturers had been wolfed up and homologated and nonetheless the enterprise was failing. Calls for presidency help had been made, all of the manufacturers had been introduced collectively beneath British Leyland. BL was partially nationalised, and regardless of receiving about 11 billion kilos of help, collapsed in 1975. Everybody most well-liked the brand new Japanese automobiles that had been cheaper, higher made, and didn’t always break down.

Lord Nuffield (William Morris) as soon as bragged that there was little competitors because the British empire straddled the globe. The colonies had been inspired to purchase British. Certainly, within the ’50s, there weren’t too many different automobiles available. Regardless of all this, the juggernaut that was the British auto trade went down in a heap. The manufacturers had been bought to SAIC. I’m hoping that in the future they’ll make an electrical Wolseley to take a seat alongside their best-selling electrical MG4.

Why am I telling you all this? As a result of what I see taking place at present within the international auto trade appears to be historical past repeating itself — although, at a way more speedy tempo. Plenty of mergers, partnerships, and badge engineering. Will it work? Particularly, will it work for Stellantis?

New Fiat Topolino: electrifying urban mobility with a unique taste of Dolce Vita — New Fiat Topolino, courtesy Stellantis.

Stellantis was fashioned by a merger of PSA and FCA in 2022, changing into the fourth largest automaker on the planet, behind Toyota, Volkswagen, and Hyundai. Has Stellantis turn into too huge to fail? Or too sophisticated to succeed? The primary CEO, Carlos Tavares, has resigned after disagreements with the corporate board. Sound acquainted, Herbert? Solely time will inform.

PSA was fashioned in 1976 when Peugeot acquired bankrupt Citroen. In 1978, Chrysler Europe was added to the secure. Chrysler Europe owned the manufacturers Rootes and Simca. Because of monetary difficulties, PSA accepted the French authorities shopping for a 13% share, as did the Dongfeng motor firm of China. In 2017, PSA acquired Vauxhall and Opel. As a aspect notice, my first automotive was a Vauxhall Viva, made within the UK and assembled in Australia in 1972. So, that’s already an advanced multi-brand conglomerate.

Opel Grandland.

FCA was fashioned in 2012 when Fiat acquired a majority stake in Chrysler. FAC controls the manufacturers Abarth, Alfa Romeo, Chrysler, Dodge, Fiat, Fiat Skilled, Jeep, Lancia, Maserati, and Ram Vehicles. I plan to focus totally on the European manufacturers.

Throughout 2024, Stellantis has needed to pause manufacturing at some Italian carmaking services — The Mirafiori plant in Turin, Italy, which makes the electrical Fiat 500 and Maserati sports activities automobiles, and the Pomigliano d’Arco, Termoli, and Pratola Serra factories. There was dialogue of axing unprofitable manufacturers. And but there’s additionally talk of introducing 40 new models?

Stellantis isn’t within the good books with Italy’s authorities. The Italian prime minister believes that Stellantis favours the French manufacturers over Fiat. She insists that extra automobiles should be made in Italy, to guard Italian jobs, all of the whereas watching the expansion in China’s share of the worldwide EV market. 3500 jobs have been misplaced at Fiat in Italy up to now 12 months. Fiat is producing automobiles in Morocco and Poland. “Fiat appears to be not Italian any more.” Italy is considering buying a piece of Stellantis in order that it feels it’s on equal phrases with the French.

Issues usually are not so good within the UK, with the potential of the closure of the Vauxhall van manufacturing facility in Luton — placing 1100 jobs in danger.

In the meantime, within the “favoured” French auto trade: the consensus appears to be that it’s one disaster after one other. Michelin has confirmed the closure of two crops and the lack of 1,200 jobs. MA France (subcontractor to Stellantis) had its plant in Aulnay-sous-Bois positioned in obligatory liquidation. The corporate had requested for a 12% value improve to offset rising power and manufacturing prices. Stellantis stated “no.”

Denis Bréant, a member of the federal bureau of metalworkers and head of the CGT’s automotive exercise, a French commerce union, reported: “Business at the MA France plant in Aulnay-sous-Bois has ceased, and the employees are occupying the premises and fighting to obtain supra-legal bonuses that are higher than what they are being offered.”

Plateforme Vehicle (PFA), the French sector commerce physique, stated that “the French automotive industry needs to reinvent itself by investing in electric vehicles.”

Stellantis’ working margin has gone from double figures to round 6%, and the corporate is on the lookout for methods to chop prices. In fact, they’re blaming the Chinese language, EU emission targets, and everybody else for his or her lack of response to the apparent motion of expertise and the market. And, in fact, calling for presidency help. The French authorities owns 6% of Stellantis. The France 2030 program is offering 5 billion euros to “support research and development, but also the industrialisation of vehicles and their components in France.”

The Stellantis plant at Poissy with a capability of 200,000 subcompact automobiles is under threat of closure. It at present produces the DS 3 and the Opel Mokka. For these of us wanting on, it’s apparent that the automotive trade is in disaster. European automotive manufacturing was 21 million items in 2017 (peak of world automotive manufacturing additionally). By 2023, it has dropped to 18 million. That is affecting your entire provide chain.

Some can see by means of the blame sport. “Renault and Stellantis have been relocating their activities since the 1990s. At the time, electric cars and competition from Asia could not be used as a pretext. Today, all this is used as an excuse to benefit from billions of euros in public subsidies and make ever higher margins,” says Denis Bréant, the commerce unionist. The Citroën’s e-C3 electrical automotive is produced in Slovakia.

Stellantis believes that the “job is done in Europe,” regardless of the software program points with its Citroen electrical automobiles and the mass manufacturing of the Peugeot e-3008. Stellantis employs over 100,000 individuals in 14 European nations, and must service its 32-billion-euro debt. It appears to be like to me like Stellantis goes the identical approach as British Leyland. Will Leapmotor save them? Will or not it’s one other case of a Chinese language firm shopping for out the manufacturers? A blunt evaluation from one in all our readers: “Stellantis, likely, will be split back up, sold off and most of them (the brands) will die.”