One should poll these soon-to-be-idled 1,200 workers, the announcement just before Christmas, their opinions on EVs.
A consistent theme on the blog: the transition to EVs is going to be very, very painful and very, very expensive.
From CNBC just before the news cycle ended Friday, this announcement;
DETROIT – Stellantis said Friday that it plans to indefinitely idle a Jeep plant in Illinois, starting early next year, to cut costs as it invests in electric vehicles.
The plant will cease production as of February 28, 2023. The more than 1,200 workers at the facility, which produces Jeep Cherokee SUVs, will be placed on indefinite layoffs, the company said.
More from the article:
“Our industry has been adversely affected by a multitude of factors like the ongoing COVID-19 pandemic and the global microchip shortage, but the most impactful challenge is the increasing cost related to the electrification of the automotive market,” Stellantis said.
The Illinois plant has only been running on one of three assembly shifts. It has sporadically been idled during the coronavirus pandemic and ongoing semiconductor chip shortage.
Cherokee sales were down by about 61% through the third quarter of this year, more than any other vehicle in Jeep’s lineup.
Cherokee sales were down the most? At the low end, price point? This suggests Jeep owners are wealthy and willing to pay "up" for the high-end Jeep -- let's say the Jeep Grand Wagoneer which runs about $90,000.
The Cherokee starts at about $35K.
XOM sees a doubling of its free cash flow by 2027, while Stellantis nixes an iconic Jeep brand to help pay for transition to EVs.
Coincidentally, XOM increased its quarterly dividend this quarter, and the pay date for that first increased dividend: today. LOL. How coincidental.
I don't hold XOM directly but I bought a "starter" set of XOM decades ago for one of our two daughters and had dividends re-invested. No one has ever touched that "starter set." I'm not even sure the daughter knows she invests in XOM. My hunch: the dividends now pay more annually than the original purchase.
At last count there are no less than a gazillion auto manufacturers racing to bring EVs to market. Oil E&P? Seven major operators. A dozen or so tier two American operators, not all of which are publicly traded.
Another open-book test for investors.
Stellantis is down about 25% for the year (52-weeks), dropping close to 3% today.
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By the way, on a completely different note, PFE announced that it increased its quarterly dividend. Not by much, but still an increase. Stellantis does not have a dividend to increase. XOM, as noted, just increased its dividend
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