Stellantis is taking drastic measures to try to conserve liquidity. According to the Wall Street Journal, the French-Italian house is aiming to limit outside spending. In an email sent last week, finance director Natalie Knight asked her team to carefully scrutinize requests for purchases from outside suppliers. The goal is to reduce spending, and the doghouse method, as it is called internally, is a system of tighter control over purchase requests that is meant to ensure savings. Knight pointed out that this approach has been used before. This measure came after the earnings warning on the 2024 accounts launched on September 30, with a margin cut from 10% to 5.5-7% and industrial free cash flow expected between -5 and -10 billion euros instead of positive. The problem lies mainly in declining sales in the U.S. market and excessive accumulated inventories: elements that are negatively affecting Stellantis' profits in the U.S., its most profitable market. Despite the fact that industrial cash flow will be "significantly negative" this year, the head of investor relations assured that the company will have good cash on hand at the end of the fiscal year.
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