Will Stellantis Go the Way of British Leyland? – CleanTechnica

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Is Stellantis circling the drain? Will it take the French and Italian economies with it? Sales are down across the conglomerate, approximately 11% YOY.

Bear with me, I need to share a bit of history and I will leave a lot out and try to simplify things. A lot has happened in the last century and a half in the history of the automobile. My experience is with the UK and Australia. Some of our American readers might like to do a similar article on the US industry. Also note that Dr Paul Wildman and I have published on CleanTechnica about the issues faced by the German (VW) and Japanese (Toyota) auto industries. You can read about that here and here.

At the turn of the 20th century, horseless carriages were the new new thing. In England, it was William Morris, Herbert Austin, and Frederick Wolseley, who were setting the pace. 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 automobile. Races were held to prove how fast these machines could go and records were set and broken for hill climbs, endurance, and speed. Strangely, we are still doing these things.

People learned new skills and adapted old ones. Engineers went from external combustion (steam engines) to internal combustion. Carriage makers adapted their designs to be pulled by an engine not a horse. Companies were started, folded, adsorbed, and remade. I drove a Wolseley for a while (2010–2022) and looked into the history of the company. Sir Frederick Wolseley saw the need for powered shearing tools in Australia in the 1890’s, went back to England, and used the family company to make the product. He made a fortune and then went into cars.

When working in England in the ’70s, I drove a Morris Oxford. It was the same car as my Wolseley. There were 10 models (MG, Riley, Morris, Austin, etc.), all with slightly different trims and price points, and designed for different demographics. Badge engineering. Again, it appears to me that we now have brands doing the same thing. The joke in 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 disregard for the customer. Sound familiar?

Brands were gobbled up and homologated and still the business was failing. Calls for government support were made, all the brands were brought together under British Leyland. BL was partially nationalised, and despite receiving about 11 billion pounds of support, collapsed in 1975. Everyone preferred the new Japanese cars that were cheaper, better made, and did not constantly break down.

Lord Nuffield (William Morris) once bragged that there was little competition as the British empire straddled the globe. The colonies were encouraged to buy British. Indeed, in the ’50s, there were not too many other cars to be had. Despite all this, the juggernaut that was the British auto industry went down in a heap. The brands were sold to SAIC. I am hoping that one day they will make an electric Wolseley to sit alongside their best-selling electric MG4.

Why am I telling you all this? Because what I see happening currently in the global auto industry seems to be history repeating itself — though, at a much more rapid pace. Lots of mergers, partnerships, and badge engineering. Will it work? Specifically, will it work for Stellantis?

Stellantis was formed by a merger of PSA and FCA in 2022, becoming the fourth largest automaker in the world, behind Toyota, Volkswagen, and Hyundai. Has Stellantis become too big to fail? Or too complicated to succeed? The first CEO, Carlos Tavares, has resigned after disagreements with the company board. Sound familiar, Herbert? Only time will tell.

PSA was formed in 1976 when Peugeot acquired bankrupt Citroen. In 1978, Chrysler Europe was added to the stable. Chrysler Europe owned the brands Rootes and Simca. Due to financial difficulties, PSA accepted the French government buying a 13% share, as did the Dongfeng motor company of China. In 2017, PSA acquired Vauxhall and Opel. As a side note, my first car was a Vauxhall Viva, made in the UK and assembled in Australia in 1972. So, that’s already a complicated multi-brand conglomerate.

FCA was formed in 2012 when Fiat acquired a majority stake in Chrysler. FAC controls the brands Abarth, Alfa Romeo, Chrysler, Dodge, Fiat, Fiat Professional, Jeep, Lancia, Maserati, and Ram Trucks. I plan to focus primarily on the European brands.

During 2024, Stellantis has had to pause production at some Italian carmaking facilities — The Mirafiori plant in Turin, Italy, which makes the electric Fiat 500 and Maserati sports cars, and the Pomigliano d’Arco, Termoli, and Pratola Serra factories. There has been discussion of axing unprofitable brands. And yet there is also talk of introducing 40 new models?

Stellantis is not in the good books with Italy’s government. The Italian prime minister believes that Stellantis favours the French brands over Fiat. She insists that more cars need to be made in Italy, to protect Italian jobs, all the while watching the growth in China’s share of the global EV market. 3500 jobs have been lost at Fiat in Italy in the past 12 months. Fiat is producing cars in Morocco and Poland. “Fiat appears to be not Italian any more.” Italy is considering buying a piece of Stellantis so that it feels it is on equal terms with the French.

Things are not so good in the UK, with the possibility of the closure of the Vauxhall van factory in Luton — putting 1100 jobs at risk.

Meanwhile, in the “favoured” French auto industry: the consensus seems to be that it is one crisis after another. Michelin has confirmed the closure of two plants and the loss of 1,200 jobs. MA France (subcontractor to Stellantis) had its plant in Aulnay-sous-Bois placed in compulsory liquidation. The company had asked for a 12% price increase to offset rising energy and production costs. Stellantis said “no.”

Denis Bréant, a member of the federal bureau of metalworkers and head of the CGT’s automotive activity, a French trade 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 Automobile (PFA), the French sector trade body, said that “the French automotive industry needs to reinvent itself by investing in electric vehicles.”

Stellantis’ operating margin has gone from double figures to around 6%, and the company is looking for ways to cut costs. Of course, they are blaming the Chinese, EU emission targets, and everyone else for their lack of response to the obvious movement of technology and the market. And, of course, calling for government support. The French government owns 6% of Stellantis. The France 2030 program is providing five 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 capacity of 200,000 subcompact cars is under threat of closure. It currently produces the DS 3 and the Opel Mokka. For those of us looking on, it is obvious that the automotive industry is in crisis. European car production was 21 million units in 2017 (peak of global car production also). By 2023, it has dropped to 18 million. This is affecting the entire supply chain.

Some can see through the blame game. “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 trade unionist. The Citroën’s e-C3 electric car is produced in Slovakia.

Stellantis believes that the “job is done in Europe,” despite the software issues with its Citroen electric cars and the mass production of the Peugeot e-3008. Stellantis employs over 100,000 people in 14 European countries, and needs to service its 32-billion-euro debt. It looks to me like Stellantis is going the same way as British Leyland. Will Leapmotor save them? Will it be another case of a Chinese company buying out the brands? A blunt assessment from one of our readers: “Stellantis, likely, will be split back up, sold off and most of them (the brands) will die.”