Things are grim in the automotive industry right now.

First off, there's a reason I didn't put this story under my usual #Bidenomics Update, even though it has many components that are attributable to the brilliant Biden economic machinations that have brought us so many of our current difficulties. Not to mention, there are some uniquely American aspects to Stellantis's problems. But this is also a global slowdown in manufacturing as well as a global climate cult political interference problem, and as much as I'd like, I can't lay that all at POTATUS and Harris's feet.

But I will dump on them a bunch as there is plenty of gloom to go around.

When was the last time you heard a chief executive talk about the state of their sector like this?

“The auto industry is in turmoil,” Stellantis CEO Carlos Tavares said to begin his interview Thursday with Bloomberg Television. “Looking at the results, everybody is going in the same direction.”

What direction is that? Well, if it's the same direction as the results Stellantis, the multinational parent company of such brands as Fiat, Chrysler, Jeep, Maserati, Lancia, etc, just announced, "off a cliff" pretty well sums up where.

Auto giant Stellantis on Thursday reported a steep drop in first-half net profit, citing reduced volumes, temporary production gaps and lower market share in North America.

The company, which owns household names including Jeep, Dodge, Fiat, Chrysler and Peugeot, reported first-half net profit of 5.6 billion euros ($6.07 billion), down 48% from the same period of 2023.

Stellantis’ adjusted operating income for the first six months of 2024 came in at 8.5 billion euros, down 5.7 billion euros on the year, primarily due to decreases in North America.

Milan-listed shares of Stellantis fell around 8.5% on Thursday.

The "decreases in North America" was particularly interesting because you might think the company ate a bunch of unsellable EVs, like Ford and GM had to, right? But actually not and I think the answer is far worse than a product no one wants.

It's a product that is being built so shoddily the company is losing buttloads fixing it before it even gets to dealers' lots.

How 'bout them apples, proud winners of a humongous new UAW contract? Aren't you the ones building these things?

...For Stellantis, the problems are most acute in the U.S., a key region for profits, where the company has seen high inventory levels, a string of executive departures and quality issues weigh on profit.

What kind of problems are we talking about, and how many?

...Tavares said he would be working through the summer with his U.S. team on how to improve performance and cut inventory. "We consider that the job is done in Europe," he said. "The job is not done in the U.S. and we are now going to take care of that work."

Tavares said the company's U.S. plants are producing too many vehicles that need repairs before they can be shipped to dealerships, pointing to the Ram 1500 plant in Sterling Heights, Michigan, as one of the main culprits.

The high-margin RAM pickups and Jeeps that Stellantis sells to U.S. consumers have driven its profits, but the company's weak margin "raises questions over Stellantis' cost efficiency reputation," Bernstein analysts wrote in a client note.

Big trucks are big bucks (witness the Ford F Series bankrolling that company through its epic EV disaster) and Ram cannot afford to have their reputation besmirched with quality problems in this competitive market. And the issue are apparently so obvious as they come off the production line, that they have to be remediated before they hit the dealers.

That's awful. And that doesn't speak well of Shawn Fain's UAW, especially after his war on the Detroit 3 early this fall produced massive contracts for his union workers at the plants. 

The EV mandates and ensuing production and sales debacles have also contributed to denting the bottom line, both in Europe and the States. CEO Tavares puts the blame squarely on politicians.

Stellantis CEO makes it clear - blame politicians for EV sales expectations.

The EVs ramp up "is not happening as quickly as the political leadership had expected. what we are seeing in the western world right now is the consumers are not supporting as much the political… pic.twitter.com/COlRepGa9C

— Dan Tsubouchi (@Energy_Tidbits) July 25, 2024

But, as one wag on X notes, the automakers gladly had their hands out when they thought the government was gifting them a sure thing with the mandates, so there's plenty of blame to go around.

They should be catering to their customers. Only 2% of Michiganders are driving EVs. Their customer base is taking a backseat to the elite.

— Heather Dow (@PatriotPostGirl) July 26, 2024

...Most Americans don’t need or want government telling us what cars & trucks we can or can’t buyThe Biden/Harris EV mandate is also a jobs-killer for Michigan’s autoworkers

So CEO Tavares is in a cutting move, which should also chill the hearts of the UAW, because most of those plans involve the US. In Europe, there is talk of selling off the fabled Maserati label (to Ferrari right now, if you can believe it). Fiat and the wee little car brand Lancia are also names on the chopping block there.

If brands don't cut the profit mustard... *knife across throat*

In the States, The Chrysler Pacifica vans could get axed, which basically means the end of Chrysler. Headlines like these don't help make a case to keep them or build customer loyalty.

Stellantis tells owners of over 24,000 hybrid minivans to park outdoors due to battery fire risk https://t.co/9WFLxjc76y pic.twitter.com/N6l3S5pfR9

— Financial Post (@financialpost) July 26, 2024

Tavares, who makes $40M a year by the way, is not allowing incentives or price discounts to cut into already thin margins in an effort to move the vehicle overload off American lots. Could be a tough sell.

When I drove by an auto park Dodge dealership this week their employees had to park on the road because every single spot in the lot has a new car in it.

Inventory overload.
Prepare for slowdown.

— Scott (@ScottPolhamus) July 21, 2024

Stellantis does still have plans to introduce 20 new models later this year, including a brand-new Dodge Charger. That might help save some jobs in the States should the economy pick up and the predicted interest rate cuts finally begin.

Which, of course, they will - it's an election year.

GM was about the only car company to survive earnings season on a positive note. Nissan was down 99%, again, mostly based on operations in the US.

 Nissan has a Rogue problem in the U.S. that is torpedoing global profits.

A lackluster launch of the updated crossover, Nissan’s top-selling nameplate, forced the embattled Japanese automaker to hoist incentives on mounting inventories of the outgoing model.

The result was soaring expenses that nearly erased parent company operating income.

In announcing the profit plunge in Nissan’s fiscal first quarter, CEO Makoto Uchida blamed the downturn on U.S. operations and cut the company’s full-year financial outlook.

If the economy doesn't start turning around for the American consumer, this is only going to get uglier.