Stellantis CFO Doug Ostermann tells Wolfe Research summit about supply chain push to deal with tariff uncertainty

Stellantis is working to mitigate the short-term impact of US tariffs on automotive parts and finished vehicle shipments in North America by pulling supplier parts from Mexico to US plants and encouraging dealers to submit vehicle orders for production with the aim of getting those vehicles shipped. 

Speaking at this week’s Wolfe Research Virtual Auto Summit Stellantis’ chief financial officer, Doug Ostermann, said the carmaker was working both upstream in the supply chain with tier one suppliers that might be impacted by US automotive tariffs, and at the same time downstream, with production of vehicles that could be impacted based on dealers’ orders.

Ostermann indicated that parts stock, including safety buffer parts, that would normally be kept at the suppliers have been moving across the border to Stellantis plants.

“That’s not the way we normally operate,” said Ostermann at the summit, “but in order to mitigate any short-term impact, we’ve been taking some steps.”

“We’ve been also working kind of downstream with our dealers to collect orders of units that could be impacted, to try and produce them over the last month hiatus that we’ve had,” he said.

Ostermann said that for the vehicles Stellantis produces in Canada and Mexico it currently had a good supply on the ground at the dealers, with between 70-80 days’ supply of most of those vehicles.

Understanding industry needs
What has also been important for Stellantis has been ongoing dialogue with the US Trump administration at various levels, according to Ostermann.

“We appreciate the opportunity to provide that input to help them understand the issues within our industry specifically, and the ways in which they could help us to help them achieve their policy objectives,” he said.

Ostermann added that the Trump government’s focus on support for US automotive manufacturing was exciting to see and it was a priority to help the government understand what the industry needs were to achieve growth in localised vehicle output.

In January, Stellantis announced a raft of commitments to manufacturing in the US. They included confirmation to reopen its shuttered Belvidere plant in Illinois to make a mid-size truck, supported by a $5 billion investment. It is also plans to build the next generation Dodge Durango at Detroit Assembly Complex in Michigan, and well as investment the Kokomo plant in Indiana. Stellantis has also committed to investment in both assembly and machining in Toledo.

Speaking of the current “ongoing situation” related to North American vehicle manufacturing and trade, Ostermann said that, as with the adaptions Stellantis made for the first USMCA, which was put in place in 2020 during the first Trump administration, the carmaker would “adapt to weather the changes which come about on April 2nd or thereafter”.

Ostermann said a good focus for the Trump administration was the roughly 4m units that come into the US market that are not USMCA complaint, including those that are assembled in Mexico and Canada, but also from South Korea, Japan and Germany, which he said often had little or no US content.

“We feel that if the [US] administration wants to focus on supporting US manufacturing, that’s a place for them to also take a look at,” said Ostermann.