Will Stellantis Go the Method of British Leyland?

By Imran Last updated Dec 20, 2024

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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 have to share a little bit of historical past and I’ll depart lots out and attempt to simplify issues. So much has occurred within the final century and a half within the historical past of the car. My expertise is with the UK and Australia. A few of our American readers may love to do the same article on the US business. Additionally word that Dr Paul Wildman and I’ve printed on CleanTechnica in regards to the points confronted by the German (VW) and Japanese (Toyota) auto industries. You possibly can examine that right here and right 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 car. Races had been held to show how briskly these machines may go and data had been set and damaged for hill climbs, endurance, and velocity. Unusually, we’re nonetheless doing this stuff.

Folks realized new expertise 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. Firms had been began, folded, adsorbed, and remade. I drove a Wolseley for some time (2010–2022) and regarded 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.

Stellantis — Wolseley, a part of British Leyland. Photograph courtesy of Majella Waterworth.

When working in England within the ’70s, I drove a Morris Oxford. It was the identical automobile as my Wolseley. There have been 10 fashions (MG, Riley, Morris, Austin, and many others.), all with barely completely different trims and worth 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 physician has ordered me to take a relaxation. So, I’ve utilized for a job at British Leyland.” There was hubris, lack of innovation, and disrespect for the shopper. Sound acquainted?

Manufacturers had been devoured up and homologated and nonetheless the enterprise was failing. Calls for presidency assist 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 assist, collapsed in 1975. Everybody most popular the brand new Japanese automobiles that had been cheaper, higher made, and didn’t continually 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 business went down in a heap. The manufacturers had been bought to SAIC. I hope that sooner or later they’ll make an electrical Wolseley to sit down alongside their best-selling electrical MG4.

Why am I telling you all this? As a result of what I see occurring at present within the world auto business appears to be historical past repeating itself — although, at a way more fast tempo. A lot 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 shaped by a merger of PSA and FCA in 2022, changing into the fourth largest automaker on this 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 shaped in 1976 when Peugeot acquired bankrupt Citroen. In 1978, Chrysler Europe was added to the secure. Chrysler Europe owned the manufacturers Rootes and Simca. As a consequence 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 word, my first automobile was a Vauxhall Viva, made within the UK and assembled in Australia in 1972. So, that’s already a sophisticated multi-brand conglomerate.

Opel Grandland.

FCA was shaped 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 Vans. I plan to focus totally on the European manufacturers.

Throughout 2024, Stellantis has needed to pause manufacturing at some Italian carmaking amenities — 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 speak of introducing 40 new fashions?

Stellantis is just not 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 have to 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 prior to now 12 months. Fiat is producing automobiles in Morocco and Poland. “Fiat seems to be not Italian any extra.” Italy is contemplating shopping for a chunk of Stellantis in order that it feels it’s on equal phrases with the French.

Issues will not be so good within the UK, with the potential of the closure of the Vauxhall van manufacturing unit in Luton — placing 1100 jobs in danger.

In the meantime, within the “favoured” French auto business: the consensus appears to be that it’s one disaster after one other. Michelin has confirmed the closure of two vegetation 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% worth enhance to offset rising power and manufacturing prices. Stellantis mentioned “no.”

Denis Bréant, a member of the federal bureau of metalworkers and head of the CGT’s automotive exercise, a French commerce union, reported: “Enterprise on the MA France plant in Aulnay-sous-Bois has ceased, and the workers are occupying the premises and preventing to acquire supra-legal bonuses which might be increased than what they’re being supplied.”

Plateforme Vehicle (PFA), the French sector commerce physique, mentioned that “the French automotive business must reinvent itself by investing in electrical automobiles.”

Stellantis’ working margin has gone from double figures to round 6%, and the corporate is searching for methods to chop prices. After all, they’re blaming the Chinese language, EU emission targets, and everybody else for his or her lack of response to the apparent motion of know-how and the market. And, after all, calling for presidency assist. The French authorities owns 6% of Stellantis. The France 2030 program is offering 5 billion euros to “assist analysis and growth, but in addition the industrialisation of automobiles and their parts in France.”

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

Some can see by the blame sport. “Renault and Stellantis have been relocating their actions for the reason that Nineties. On the time, electrical automobiles and competitors from Asia couldn’t be used as a pretext. Right this moment, all that is used as an excuse to profit from billions of euros in public subsidies and make ever increased margins,” says Denis Bréant, the commerce unionist. The Citroën’s e-C3 electrical automobile is produced in Slovakia.

Stellantis believes that the “job is completed 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 seems to me like Stellantis goes the identical manner 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, probably, will likely be cut up again up, bought off and most of them (the manufacturers) will die.”