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Forbes
04-05-2025
- Automotive
- Forbes
Stellantis Exposed In Europe As Tariff Turmoil Undermines Automakers
There's a brief period after major corporations like Stellantis report on their finances and provide forecasts for the rest of the year when investors feel confident about the future of their investments, or at least know the worst for a little while. That was then; now we are in President Trump tariff turmoil territory and a key factor for valuing a huge corporation trading internationally has been undermined. If you don't know the prices you can charge, your control over a key element has disappeared and your power to predict profitability will be destroyed. That's why Stellantis, after reporting first quarter sales fell 14% to €35.8 billion compared with the same period last year, said it would not make any predictions about its profits for the year. Stellantis reports profits every six months, not quarterly. Stellantis wasn't alone. Mercedes withdrew its profit guidance for the year, as did Geely of China-owned Volvo Cars. Volkswagen reported first quarter earnings dropped 40% in the first quarter compared with the same period last year to €3.1 billion and its overall profit margin slid to 3.7% from 6%. VW said its profits were hit by uncertainties over the Trump tariffs, and profits for the year would be at the lower end of its 5.5 to 6.5% target range. VW said any possible fallout from the Trump tariffs was not included in the forecast. BMW has yet to report its first quarter finances. Stellantis is currently leaderless, in financial difficulties and under great pressure to make some radical changes. CEO Carlos Tavares quit in December. A new leader is expected to be appointed by the end of next month. Stellantis's operating profit margin in 2024 was 5.5%, down sharply from 2023's 12.8%. Stellantis had said before the Trump tariffs that it expects little improvement in 2025. Sales in Europe fell 7.3% to about 2 million in 2024, in an overall market that rose 0.8%. according to ACEA. Market share was 15.2%, behind the leader Volkswagen and its multi-brands at 26.3%. Tavares orchestrated the merger between Fiat Chrysler and France's Groupe PSA in 2021, bringing together 14 brands. Many of the brands compete in the same market, including Citroen, Peugeot, Fiat, Vauxhall, and Opel in the European mass market. Lancia, DS, Alfa Romeo and Abarth sit in the wannabe premium sector, and Dodge, Ram, Jeep and Chrysler are in the U.S. Storied Italian sportscar maker Maserati sits atop of the list. Analysts say there is much scope to remove brands and cut headcount. 'The company's outdated product portfolio has been a persistent issue, forcing it into an aggressive product launch cycle with 20 new models set for release. While this move is necessary to regain competitiveness, it carries significant risks, including potential quality concerns and production delays,' said Orwa Mohamad, analyst at investment researcher Third Bridge. Stellantis's European operation is a weak-looking target for new Chinese competition. 'Stellantis faces a significant threat from Chinese EV manufacturers in Europe, even with the recently imposed tariffs aimed at protecting local automakers. Chinese brands have rapidly closed the gap in product quality, technology and cost efficiency, making them highly competitive in the mass-market segments where Stellantis operates,' Mohamad said. Other analysts agree that Stellantis needs time to stabilize. In Europe the most threatened brands are Lancia, Alfa Romeo and DS. Citroen. Peugeot, Fiat Opel and Vauxhall are fighting over the same customers. At the time of the merger this wasn't seen as a problem. Since then the overall market has shrunk, while competition has ramped up as Chinese manufacturers raised their game. Rationalizatiion seems inevitable. Investment researcher Bernstein, in a report which talked about 'some positives amid great uncertainties' in the first quarter said Stellantis is adjusting production and looking to improve sourcing to mitigate tariff impacts. Bernstein said a couple of positive surprises in the quarter included the average selling price of vehicles in the U.S. at €44,300 ($50,100), 1.0% better than expected, while in Europe it was €23,800 ($26,900), 6.1% above consensus. Third Bridge's Mohamad said Stellantis still had inventory and brand positioning problems in the U.S. 'With Ford and other rivals doubling down on their SUV and truck lineups, Stellantis will need to take bold steps in marketing and personalization to stay relevant,' he said. 'Looking ahead, Stellantis faces a 'crunch point' over the next six to 12 months, requiring significant strategic adjustments. Cost-cutting measures, better alignment of production with demand, and improved software and electrification strategies will be crucial,' Mohamad said. Experts wonder how long the tariff turmoil will last. President Trump aims to strike 90 trade deals during a 90-day pause on his reciprocal tariffs announced earlier in April. His administration has repeatedly said it was negotiating bilateral trade deals with dozens of countries, according to Reuters. Trump's aggressive trade stance has cascaded through the global economy since his return to office in January, and the 90-day pause was unveiled after fears of recession and inflation sent financial markets into a tailspin, Reuters said in a report from Washington.
Yahoo
01-05-2025
- Business
- Yahoo
Opinion - To rebuild America's maritime fleet, Congress must create demand for US ships
With his 'Restoring America's Maritime Dominance' executive order last month, President Trump sounded the alarm: Our nation will either rebuild its commercial shipping fleet now or drift further into dependence on foreign vessels, most flying the Chinese flag. The executive order's mandate for a maritime action plan calls for a serious agenda by various agencies to revive the merchant marine, but meaningful change will require Congress to step up and do its job. That starts with creating real, sustained demand for U.S. shipping. I grew up in Mobile, Ala., a port city with the maritime industry in its blood. My father worked as a commercial mariner, and I've had the privilege of representing a district with one of the largest shipyards in the country. I've seen firsthand how critical the maritime industry is to our economic and national security alike. I've also borne witness to what decades of neglect have done to a once-proud industry. Growing up, I was in awe of the bustling waterfront with enormous cargo vessels of all types pulling in with the Stars and Stripes flying boldly from their flagstaffs, and homeports from the greatest cities in the country painted on their sterns. Today, less than 1.6 percent of U.S. imports and exports move on U.S.-flagged vessels. The rest are hauled by foreign-owned fleets, often underwritten by our strategic adversaries. China-owned or subsidized shipyards now build 74 percent of the world's ships — we build 0.2 percent. If this disparity doesn't keep you up at night, it should. Without a robust domestic shipping fleet, America is economically reliant and strategically vulnerable. U.S.-flagged ships are required by law to support national defense in times of war or emergency, as they did to critical effect in numerous conflicts in our nation's history. In a crisis, if our supply chain depends on a fleet we don't control, we're not a maritime power — we're a client state. President Trump's executive order rightly targets the regulatory gridlock that has eroded American shipbuilding, but it falls to Congress to fill the other half of the equation: ensuring that U.S. ships have cargo to carry. Without steady demand for their services, new ships will just be left to rust at port. I'll offer three simple ideas to help accomplish this goal. First, it should double the tax deduction for companies that ship American. Today, U.S. businesses can deduct 100 percent of shipping costs, whether they use U.S.-flagged or foreign vessels. But foreign ships typically operate at lower cost, thanks to less-stringent labor, safety, and tax regimes. Doubling the current deduction to 200 percent for cargo moved on American ships would almost wipe out that price gap. It's a simple, voluntary incentive that, by some estimates, could boost demand by nearly 20 percent and support the addition of nearly two dozen ships to the fleet. Next, Congress should require 100 percent of taxpayer-funded cargo to be moved on U.S.-flagged vessels wherever possible. This rule is already in place at the Department of Defense, but most civilian agencies still operate under a 50 percent requirement to use U.S. vessels. There is no sound rationale for that inconsistency. If taxpayers are footing the bill, the cargo should support American workers, American ships and American security. This would make a big difference given that the U.S. government is one of the largest shippers in the country. And finally, we should expect more from American companies. Every week, I see ads touting a company's 'Buy American' values. But when will those same businesses commit to 'Ship American?' Congress can jumpstart the trend by encouraging the formation of a Ship American Coalition — an alliance of importers and exporters willing to voluntarily commit more cargo to U.S. vessels. Even a 10 percent shift from the likes of Amazon, Walmart and John Deere would have a meaningful impact on fleet demand, and they could benefit from the same patriotic branding they use to sell American-made goods. Taken together, these ideas offer a streamlined, practical way to generate the cargo volumes that will sustain an expanded U.S. fleet. They are not merely a nostalgic appeal to maritime romanticism but rather an economic and strategic necessity. America cannot be the world's leading economic power if we do not own our own ships — and use them. I know from personal experience that our country doesn't lack the talent or resources to build ships; we just lack the market incentives to justify the investment. President Trump has taken the biggest step in decades to end the collective apathy that has led to our maritime decline. But unless Congress follows up with real reforms to create demand, the Maritime Action Plan will remain just that — a plan. Jerry Carl is an American politician and businessman who represented Alabama's 1st Congressional District from 2021 to 2025. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
The Hill
01-05-2025
- Business
- The Hill
To rebuild America's maritime fleet, Congress must create demand for US ships
With his ' Restoring America's Maritime Dominance ' executive order last month, President Trump sounded the alarm: Our nation will either rebuild its commercial shipping fleet now or drift further into dependence on foreign vessels, most flying the Chinese flag. The executive order's mandate for a maritime action plan calls for a serious agenda by various agencies to revive the merchant marine, but meaningful change will require Congress to step up and do its job. That starts with creating real, sustained demand for U.S. shipping. I grew up in Mobile, Ala., a port city with the maritime industry in its blood. My father worked as a commercial mariner, and I've had the privilege of representing a district with one of the largest shipyards in the country. I've seen firsthand how critical the maritime industry is to our economic and national security alike. I've also borne witness to what decades of neglect have done to a once-proud industry. Growing up, I was in awe of the bustling waterfront with enormous cargo vessels of all types pulling in with the Stars and Stripes flying boldly from their flagstaffs, and homeports from the greatest cities in the country painted on their sterns. Today, less than 1.6 percent of U.S. imports and exports move on U.S.-flagged vessels. The rest are hauled by foreign-owned fleets, often underwritten by our strategic adversaries. China-owned or subsidized shipyards now build 74 percent of the world's ships — we build 0.2 percent. If this disparity doesn't keep you up at night, it should. Without a robust domestic shipping fleet, America is economically reliant and strategically vulnerable. U.S.-flagged ships are required by law to support national defense in times of war or emergency, as they did to critical effect in numerous conflicts in our nation's history. In a crisis, if our supply chain depends on a fleet we don't control, we're not a maritime power — we're a client state. President Trump's executive order rightly targets the regulatory gridlock that has eroded American shipbuilding, but it falls to Congress to fill the other half of the equation: ensuring that U.S. ships have cargo to carry. Without steady demand for their services, new ships will just be left to rust at port. I'll offer three simple ideas to help accomplish this goal. First, it should double the tax deduction for companies that ship American. Today, U.S. businesses can deduct 100 percent of shipping costs, whether they use U.S.-flagged or foreign vessels. But foreign ships typically operate at lower cost, thanks to less-stringent labor, safety, and tax regimes. Doubling the current deduction to 200 percent for cargo moved on American ships would almost wipe out that price gap. It's a simple, voluntary incentive that, by some estimates, could boost demand by nearly 20 percent and support the addition of nearly two dozen ships to the fleet. Next, Congress should require 100 percent of taxpayer-funded cargo to be moved on U.S.-flagged vessels wherever possible. This rule is already in place at the Department of Defense, but most civilian agencies still operate under a 50 percent requirement to use U.S. vessels. There is no sound rationale for that inconsistency. If taxpayers are footing the bill, the cargo should support American workers, American ships and American security. This would make a big difference given that the U.S. government is one of the largest shippers in the country. And finally, we should expect more from American companies. Every week, I see ads touting a company's 'Buy American' values. But when will those same businesses commit to 'Ship American?' Congress can jumpstart the trend by encouraging the formation of a Ship American Coalition — an alliance of importers and exporters willing to voluntarily commit more cargo to U.S. vessels. Even a 10 percent shift from the likes of Amazon, Walmart and John Deere would have a meaningful impact on fleet demand, and they could benefit from the same patriotic branding they use to sell American-made goods. Taken together, these ideas offer a streamlined, practical way to generate the cargo volumes that will sustain an expanded U.S. fleet. They are not merely a nostalgic appeal to maritime romanticism but rather an economic and strategic necessity. America cannot be the world's leading economic power if we do not own our own ships — and use them. I know from personal experience that our country doesn't lack the talent or resources to build ships; we just lack the market incentives to justify the investment. President Trump has taken the biggest step in decades to end the collective apathy that has led to our maritime decline. But unless Congress follows up with real reforms to create demand, the Maritime Action Plan will remain just that — a plan.
Fashion Network
27-04-2025
- Automotive
- Fashion Network
Vehicle carriers seek relief from broad US port fees
Operators of hulking car carriers are seeking relief from the U.S. Trade Representative's surprise plan to levy port fees on all foreign-built ships in that segment, including 20 vessels that guarantee transport for the U.S. military during a war or national emergency, three sources told Reuters. USTR announced the fees on April 17 as part of an ongoing effort to hit certain China-linked ships calling at U.S. ports with fees that would fund a domestic shipbuilding revival and counter China's dominance on the high seas. The fees sent a shockwave through the vehicle carrier industry, because they went beyond targeting China-built and China-owned ships. The fees on vehicle carriers are so broad that they would hit the 20 U.S.-flagged and U.S.-crewed vehicle carriers admitted to the U.S. Maritime Security Program (MSP) that supports Washington's military readiness, according to two attorneys, who requested anonymity due to fear of reprisal. The fees also would heap massive costs on U.S. automakers already hurt by U.S. President Donald Trump 's tariff policies. The levies were not mentioned in the original USTR port fee proposal from February, so unlike operators of other vessels, vessel carriers had no opportunity to give feedback. "The fee on the car carriers came from nowhere," one of the attorneys said. Both said the USTR overreached because the fees are levied on ships made in countries that were not part of the Biden administration's fast-track investigation that found China unfairly dominates the global maritime, logistics and shipbuilding sectors. The World Shipping Council (WSC), whose members include Swedish vehicle transporter Wallenius Wilhelmsen, warned on April 18 that the fees would hit almost every car carrier and have unintended consequences. WSC declined to comment further. The attorneys and one industry group say they have requested meetings with USTR to discuss their concerns. USTR did not immediately comment on whether the body would meet with vessel carrier representatives. The USTR plans plans to charge foreign-built vehicle carriers $150 for every car the ship has capacity to carry, beginning on October 14. That fee would be $900,000 for a ship that transports 6,000 cars. Vehicle carriers are vital to U.S. military readiness because they can transport large equipment such as tanks, aircraft and helicopters. Companies with ships in the MSP include Florida-based American Roll-On, Roll-Off Carrier Group, a U.S.-flag operator of vehicle carriers that is part of Wallenius Wilhelmsen Group. New York-based Liberty Global Logistics, is another provider. Spokespeople for ARC and Liberty did not immediately respond to requests for comment, while Wallenius Wilhelmsen declined to comment. A spokesman for Maersk Line Ltd, the U.S. arm of the Danish container shipping giant which is also part of the MSP, said it is reviewing the most recent information from USTR and preparing for a range of scenarios. There are 1,466 vehicle carriers in operation, according to data from Alphaliner. Just 39 of those ships were built in the United States, Alphaliner said.
Yahoo
25-04-2025
- Automotive
- Yahoo
Vehicle carriers seek relief from broad US port fees
By Lisa Baertlein NEW ORLEANS (Reuters) -Operators of hulking car carriers are seeking relief from the U.S. Trade Representative's surprise plan to levy port fees on all foreign-built ships in that segment, including 20 vessels that guarantee transport for the U.S. military during a war or national emergency, three sources told Reuters. USTR announced the fees on April 17 as part of an ongoing effort to hit certain China-linked ships calling at U.S. ports with fees that would fund a domestic shipbuilding revival and counter China's dominance on the high seas. The fees sent a shockwave through the vehicle carrier industry, because they went beyond targeting China-built and China-owned ships. The fees on vehicle carriers are so broad that they would hit the 20 U.S.-flagged and U.S.-crewed vehicle carriers admitted to the U.S. Maritime Security Program (MSP) that supports Washington's military readiness, according to two attorneys, who requested anonymity due to fear of reprisal. The fees also would heap massive costs on U.S. automakers already hurt by U.S. President Donald Trump's tariff policies. The levies were not mentioned in the original USTR port fee proposal from February, so unlike operators of other vessels, vessel carriers had no opportunity to give feedback. "The fee on the car carriers came from nowhere," one of the attorneys said. Both said the USTR overreached because the fees are levied on ships made in countries that were not part of the Biden administration's fast-track investigation that found China unfairly dominates the global maritime, logistics and shipbuilding sectors. The World Shipping Council (WSC), whose members include Swedish vehicle transporter Wallenius Wilhelmsen, warned on April 18 that the fees would hit almost every car carrier and have unintended consequences. WSC declined to comment further. The attorneys and one industry group say they have requested meetings with USTR to discuss their concerns. USTR did not immediately comment on whether the body would meet with vessel carrier representatives. The USTR plans plans to charge foreign-built vehicle carriers $150 for every car the ship has capacity to carry, beginning on October 14. That fee would be $900,000 for a ship that transports 6,000 cars. MILITARY RISK? Vehicle carriers are vital to U.S. military readiness because they can transport large equipment such as tanks, aircraft and helicopters. Companies with ships in the MSP include Florida-based American Roll-On, Roll-Off Carrier Group, a U.S.-flag operator of vehicle carriers that is part of Wallenius Wilhelmsen Group. New York-based Liberty Global Logistics, is another provider. Spokespeople for ARC and Liberty did not immediately respond to requests for comment, while Wallenius Wilhelmsen declined to comment. A spokesman for Maersk Line Ltd, , the U.S. arm of the Danish container shipping giant which is also part of the MSP, said it is reviewing the most recent information from USTR and preparing for a range of scenarios. There are 1,466 vehicle carriers in operation, according to data from Alphaliner. Just 39 of those ships were built in the United States, Alphaliner said.
