Stellantis said to plan $10 billion in U.S. turnaround investments
Stellantis NV is planning to invest about $10 billion in the US 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 declined to be identified discussing information that’s not public. The investments over several years could be funneled into plants — including re-openings, hiring and new models — in states such as Illinois and Michigan, the people said.
Stellantis is focused on reclaiming the past success of the Jeep brand and is considering fresh investments 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.
The new spending reflects efforts by Chief Executive Officer 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 had aggressively pushed to shift its production and engineering operations to lower-cost countries like Mexico. He also invested heavily in Europe, where car demand is weak and profitability low, in the years that followed 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’ actions would mirror those of companies across industries unveiling big investmentplans in the world’s biggest economy to curry favor with President Donald Trump and also help mitigate the impact of tariffs. South Korea’s [hotlink]Hyundai Motor[/hotlink] Group in August said it would increase its investment in the US by $5 billion to $26 billion through 2028, and several big European pharmaceutical companies have also pledged billions of dollars of new spending.
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, Illinois, 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.
Filosa, an industry veteran from Stellantis’ predecessor company Fiat Chrysler Automobiles, is struggling to stabilize a group that’s suffered steep market share losses in the US 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 US deliveries that helped fuel investor optimism on Thursday.
The new CEO has started scrapping some European investments, including a decision to withdraw support for a joint hydrogen-vehicle venture with Michelin and Forvia SE. Stellantis also is mulling a sale of its Free2move car-sharing business, Bloomberg reported this week. Earlier this year, it hired McKinsey & Co. for strategic advice on Maserati and Alfa Romeo. It has repeatedly denied any plans to sell Maserati.
Read More: How Stellantis Became Global Auto’s Cautionary Tale
The increased US focus is alarming unions in Europe, where the owner of brands including Fiat and Peugeot suffers from manufacturing overcapacity. Like its rivals, Stellantis is contending with excess capacity as Chinese manufacturers led by BYD Co. expand 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 the Fiat Panda.
Filosa is scheduled to meet Italian labor union representatives on Oct. 20 as worries about possible plant closings mount. Late last year, the company presented an ambitious production plan for Italy, which adds pressure on Filosa to make good on those pledges.
This story was originally featured on Fortune.com