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Stellantis, the owner of Chrysler and Jeep, said today the six-week strike by US car workers had cost it €3bn in lost revenues, a day after General Motors reached an agreement to end the first co-ordinated walkout at the three largest carmakers in the US.
Stellantis reached a tentative agreement with the United Auto Workers on Saturday with the promise of a 25 per cent base pay rise through to April 2028, cost-of-living increases, plus bigger pay rises for starting and temporary workers.
The Stellantis announcement on strike costs came alongside results that showed revenues for the three months to the end of September rose 7 per cent to €45.1bn, beating analyst expectations.
The results come a day after General Motors said it had reached a tentative deal with the union, the final of the big three Detroit car companies to do so. GM agreed to a 25 per cent hourly pay rise over the next four years. The agreement also brings back cost-of-living allowances for workers and includes one-time bonuses for retirees, according to people familiar with the details.
GM told analysts last week that the strike was costing the company $200mn a week, totalling $800mn in earnings before interest and taxes while Ford put the cost of the six-week dispute at $1.3bn in operating earnings. Stellantis’s finance chief Natalie Knight this morning estimated the hit to profitability from the strikes at “under €750mn”.
The prospective deals between Ford, GM and Stellantis and the UAW will raise perennial questions about the competitiveness of the Detroit Three compared with non-unionised factories run by Honda, Toyota and Tesla in the US. Read the full Stellantis story.
Here’s what else I’m keeping tabs on today:
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US interest rates: The Federal Reserve begins it latest interest-rate setting meeting today. Here’s what to expect.
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Airlines: The antitrust trial against US carriers JetBlue Airways and Spirit Airlines begins. The US justice department, along with Washington DC and the states of New York and Massachusetts, has sued to block JetBlue’s proposed $3.8bn takeover of Spirit
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Economic data: US consumer confidence is expected to have declined in October, according to the Conference Board’s monthly index. Canada and Mexico publish third-quarter growth figures.
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Company results: Pfizer, Caterpillar, Amgen and GE Healthcare report results before the market opens. Chesapeake Energy, Match Group and AMD report after Wall Street’s closing bell.
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Congress: Defense secretary Lloyd Austin and secretary of state Antony Blinken will make the case for US military support for Ukraine and Israel during a Senate hearing.
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Five more top stories
1. Israel said today that its troops were “engaging with Hamas combatants” as it extended its offensive into northern Gaza. The update from the Israel Defense Forces came hours after Prime Minister Benjamin Netanyahu rejected calls for a ceasefire and said it was “a time for war”. Here’s the latest on the Israel-Hamas war.
2. China’s manufacturing activity unexpectedly contracted in October, damping hopes of increasing momentum in the economy. The country’s official manufacturing purchasing managers’ index came in at 49.5 this month, missing forecasts and trailing a reading of 50.2 in September. A reading below 50 marks contraction against the previous month. Here’s more on the latest data from China.
3. The Bank of Japan has taken a significant step to end its seven-year policy of capping long-term interest rates. The BoJ’s policy board today announced a near-unanimous decision to allow yields on the 10-year Japanese government bond to rise above 1 per cent. It maintained its policy rate at minus 0.1 per cent, the world’s only negative interest rate, and significantly revised upwards its inflation target. Here’s more on the latest BoJ policy meeting.
4. Russia has restricted western companies that sell their Russian assets from withdrawing the proceeds in dollars and euros in an effort to shore up the rouble, which has depreciated more than 20 per cent against the dollar this year. Exiting companies could face delays and losses if they insist on receiving foreign currency for sales, according to people familiar with the matter. Here are more details on the de facto currency controls.
5. Social media platform X, formerly known as Twitter, has valued its equity at $19bn, a year after Elon Musk acquired it in a $44bn deal. In an internal note sent to staffers yesterday, the company said it was awarding equity, or restricted stock units, to employees at $45 a share, according to two people familiar with the matter. Here’s the full story.
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More tech news: Deals making Google the default search engine can be “very valuable”, the chief of parent company Alphabet conceded as he took the witness stand in a landmark antitrust trial.
The Big Read
Governments around the world have made wind-powered energy central to their plans to cut emissions, setting ambitious targets for growth. To meet climate goals, offshore wind capacity will need to grow nearly 30 times by 2050. While most in the industry expect that capacity will continue to rise and that financial pressures will eventually ease, analysts increasingly doubt whether demanding targets for the technology will be met on time.
We’re also reading . . .
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Generative AI: The scale of artificial intelligence’s impact is being compared to the industrial revolution, but our own reactions to it could surprise us, writes Elaine Moore.
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Russian antisemitism: The violent scenes of an angry mob storming Dagestan’s airport in search of Israeli passengers were reminiscent of tsarist-era persecution of Jews, said Moscow’s former chief rabbi.
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Willy Shih: The professor of management practice in business administration at Harvard Business School explains what the ubiquitous syringe tells us about US supply chains.
Map of the day
Since last Friday, Israel has moved a vanguard of tanks into largely unpopulated areas of northern Gaza as part of its military operation to destroy Hamas. But within a few minutes’ drive lie the warrens of al-Shati and Jabalia refugee camps — and then, Gaza City, the heart of the militant group’s political and military machinery. Faced with Israel’s technological superiority, Hamas has turned Gaza into a haven for guerrilla war.
Take a break from the news
There has been a Phoebe Philo-shaped hole in fashion since the designer stepped down from Céline in 2018. But five years later, Philo has returned with her long-awaited fashion line. FT fashion editor Lauren Indvik discusses whether the collection lives up to the hype.
Additional contributions from Tee Zhuo and Benjamin Wilhelm
