On the conference call discussing Stellantis’ Q2 numbers, analyst Stuart Pearson of Oxcap Analytics kicked off the Q&A section with a clear challenge on North America: Could Filosa dig further into Stellantis’ lack of operating leverage in the region, the building blocks being put into place to improve performance, and some specific examples of what progress looks like these days?

Here, lightly edited for clarity and brevity, was Filosa’s response to Pearson’s question and a to-the-point outline of Stellantis’ “good, structured and articulated plan.” Consider it the scorecard for upcoming quarters of a company that still employs more than 80,000 people in the United States, Canada and Mexico.

“This plan addresses, in North America and globally, the three major challenges that we see in our company. One of those is industrial cost. We have an industrial cost gap and we are addressing that daily with [a value creation program]. And the VCP will deliver, as mentioned, 6 billion euros of cost savings run rate in ’28.

"We are on track to fully implementing 40% of the initiatives that we have identified and there are many by the end of ’26. That means that ’26 will enjoy 2.4 billion euros of cost savings plus all the extra that will come from the additional initiatives that will be executed in ’27 itself.

"So you asked for some tangible examples. So VCP, when it comes to cost, works mainly on three major drivers in our cost structure. One is direct material cost. This is the cost of components and systems and subsystems that we use in our cars. And here, we have two [points of] leverage: the purchasing leverage in negotiations and the technical leverage to implement technical savings. Those technical savings can be many [things]. For instance, new technologies that represent the same or better performances of our products at lower cost […]

"The second driver is transformation cost. This is the cost of our manufacturing system in our plants. And on there, we have tons of projects to improve efficiency. And this is why our efficiency in our plants in North America is consistently and meaningfully improving since last year. So you see that today, our efficiency runs around 89%, which is a very good result and represents 870 basis points better than prior year. In a year, the projects are really [in the] thousands.

"The third driver of cost that VCP addresses through projects and initiatives is logistics and distribution costs. And in this case, also the projects are many, many. For instance, we are optimizing our routing from suppliers to plants for plants to the yards. We are increasing the loading of our logistic tools, thus saving costs or simply. We are combining warehouses or we are shutting down warehouses and we are putting that space in our plants. This is the third driver of efficiency that VCP will address.”