It wasn’t so long ago that automaker Stellantis (NYSE:STLA) was fighting for its production life against a strike from the United Auto Workers. But now, it’s planning a slate of new job cuts, and investors aren’t taking the news well. Stellantis is down fractionally in Friday afternoon’s trading after announcing plans to drop 400 jobs.
The 400 jobs in question are mainly white-collar jobs, specifically technical and engineering employees, along with some workers in the software divisions. A recently delivered memo instructed employees who weren’t part of a union to work from home on Friday, as there would be “important operational meetings” that would ultimately determine the list of employees impacted by the layoff plan.
This comes just months after Stellantis offered buyout packages to about half of its white-collar workers following a 25% raise over the next four years to its UAW staff. Apparently, not enough of the white-collar staff took the buyouts because it’s going to the next step: outright layoff.
Oh, and There’s a Recall, Too
As if hefty layoffs weren’t enough, there’s another problem facing Stellantis right now. Stellantis put out a recall notice on around 318,000 Dodge and Chrysler cars, mostly sedans, with airbag issues. The airbags in question may be too rapidly inflated, which could ultimately cause an event involving, essentially, shrapnel. Another issue is that the inflators may unexpectedly get damp due to corrosion and cracks stemming from a manufacturing defect that might allow moisture in and cause the inflators to malfunction.
Is Stellantis a Good Stock to Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on STLA stock based on 14 Buys, four Holds, and two Sells assigned in the past three months, as indicated by the graphic below. After an 83.07% rally in its share price over the past year, the average STLA price target of $30.26 per share implies 3.77% upside potential.
