Stellantis pauses two more European plants amid struggles in EU market

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Stellantis (NYSE:STLA [https://seekingalpha.com/symbol/STLA]) is pausing production at two additional manufacturing facilities Europe as sluggish European demand and seasonal factors led the company to temporarily shutter 6 factories across the EU.

According to Reuters, the Fiat Panda and Alfa Romeo Tonale production facilities in Pomigliano, Italy, and the DS3 and Opel Mokka plants in Poissy, France will halt production between the end of September and middle of October.

As a result, 3,800 Italian staff and 2,000 employees at Poissy will be furloughed.

Regarding the decision to temporarily halt production at Pomigliano, Stellantis (NYSE:STLA [https://seekingalpha.com/symbol/STLA]) said the company “has chosen a cautious and responsible approach suspending production for a limited period.”

The most recent production pauses follows similar actions across Europe, including Stellantis' plants in Eisenach, Germany (five days), Tychy, Poland (nine days), Zaragoza, Spain (7 days), and Madrid, Spain (14 days), the closures of which will all aid in inventory management before the end of the year.

However, while the closures are temporary, the continued challenges facing Stellantis (NYSE:STLA [https://seekingalpha.com/symbol/STLA]), along with intense competition from Chinese automakers, U.S. trade policy, and macroeconomic factors in Europe has union leaders concerned the closures could become permanent.

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