Stellantis Staff Told To Slash Spending As ‘Doghouse’ Policy Returns
Stellantis CFO Natalie Knight called on employees to implement drastic cost-cutting measures to reduce the company’s cash drain
- In an internal email, Stellantis’ Chief Financial Officer warned employees that the “doghouse” policy is back.
- The revived policy aims to significantly reduce company expenses in an effort to preserve cash flow.
- The CFO urged employees to reject any spending requests that do not support critical business functions.
Stellantis has reintroduced a belt-tightening policy internally referred to as the “doghouse.” The objective is to have employees help reduce the company’s cash drain during a tough period for the automaker, which reported a sharp 20% drop in U.S. sales in the third quarter compared to the same period last year, despite offering incentives. Year-to-date, sales have slumped by 17%, underscoring the challenging environment the company is navigating.
The news was communicated to Stellantis employees in an internal email from Chief Financial Officer (CFO) Natalie Knight last week. The policy is framed as enforcing “much stricter attention and control around purchase requisitions,” aiming to drastically cut external spending wherever possible.
More: UAW Votes In Favor Of Stellantis Strike, Says It’s Time To “Sh!tcan Carlos”
According to the Wall Street Journal, which obtained the internal document, Knight urged employees to “apply more discipline” in their spending to ensure “big savings for the company.” Notably, this tightened spending policy won’t affect existing purchase orders or invoices—just new ones.
Interestingly, Knight also noted that the term “doghouse” had been used in the past, though she didn’t provide specifics. In her email, she pushed staff to reject any spending requests that weren’t deemed absolutely essential, calling for “drastic measures” to secure “the best financial results for 2024, 2025, and beyond.”
EV Transition Challenges
Also mentioned in the email was the term “Darwinian times,” originally coined by Stellantis CEO Carlos Tavares to describe the tumultuous shift to electric vehicles—a transition that has been throwing the entire automotive industry into chaos.
Despite earlier predictions of positive cash flow, Stellantis now expects to burn through $6-11 billion in cash in 2024. Nevertheless, the automaker’s Head of Investor Relations recently assured stakeholders that they’ll still have a “healthy amount of cash” by year-end.
This recent financial strain is attributed to reduced profits and the expensive process of slashing North American inventories. To make matters worse, a potential strike at U.S. plants looms large, threatening to tighten the financial noose even further.
Legal Battles with UAW
In its ongoing clash with unions, Stellantis has filed additional lawsuits against the United Auto Workers (UAW) and several local chapters. The company claims the UAW violated its contract by threatening strikes over delays in planned investments. Stellantis argues that last year’s agreement grants them some flexibility to adjust their investment strategy based on market conditions—an interpretation that UAW vehemently disputes.
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