Automaker Stellantis (STLA) has signed a new agreement with labor unions to extend reduced working hours for employees at its historic Mirafiori plant in Turin, northern Italy. This deal, which lasts five months from September 1 to January 31, was made to cut labor costs during a time when demand for Stellantis-made cars in Italy is low. Indeed, similar arrangements have already been made at other Stellantis factories in the country this month.
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As part of the agreement, employees who work fewer hours will see a temporary reduction in their pay. Interestingly, Mirafiori was once one of Europe’s largest car factories and the birthplace of the Fiat brand. However, it has been experiencing years of decline. As a result, to breathe new life into the site, Stellantis plans to begin producing a hybrid version of the Fiat 500 city car starting in November, with the hope that renewed product activity can reverse the downward trend.
Still, labor groups are asking for more. In fact, Gianni Mannori from the Fiom-CGIL union urged Stellantis to quickly assign another vehicle model to the plant in order to keep it active. It is worth noting that Stellantis, which was formed in the 2021 merger of Fiat-Chrysler and PSA Group, saw its Italian car output fall last year to the lowest level in nearly 70 years.
Is STLA Stock a Good Buy?
Turning to Wall Street, analysts have a Hold consensus rating on STLA stock based on four Buys, 10 Holds, and two Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average STLA price target of $10.51 per share implies 4% upside potential.
