The COVID-19 pandemic has had a dramatic impact on most areas of the global economy including the automotive industry. Over the course of 2020, Stellantis and the company's various stakeholders have had to develop creative solutions to maintain market share, reduce costs, and remain competitive in the US auto industry. In that regard, this business case and discussion will focus on the biggest impacts that COVID-19 has had on the company and the industry as a whole. You will work with your team to determine how Stellantis can work to address these issues in an effort to improve the recovery process, Included below are two areas of the company that your group is tasked with evaluating. Your deliverable is to assess all the the information/proposals presented for both the "Commercial and Industrial considerations and provide the Leadership team with your recommendations on how each area should proceed. Deliverables: 1. Commercial (Sales & Marketing) You are presented with three proposals to improve the company's overall sales profitability and market share for the Jeep "X" vehicle and your team must select a primary recommendation based on internal financial assessments and external market factors 2. Industrial (Manufacturing) You are presented with three proposals to improve Stellantis manufacturing cost structure and vehicle output levels at one of the company's North American manufacturing facilities. Each proposal will have a direct impact on the company's overall profitability and your team must select a primary recommendation based on internal financial assessments. There are three proposals being evaluated to improve profitability and market share. Each proposal will require you to cost out the total impact to Stellantis and you must choose only one to recommend to the Leadership Team. Proposal Historical Sales Uplift Description Spend $2M on advertising to promote a national commercial for the Jeep X vehide 5 B Implementa 0% Interest for 72-month incentive. This proposal will cost the company on average $700 per vehide sold (Assume that the incentive will be applied to 100% of the vehicles sold) 13 implement a one time lump sum cash to the customer incentive that will cost the company S500 per vehide sold (Assume that the incentive will be applied to 100% of the vehicles sold) 10% Memo: Induded on slide 4 is a costing schedule that can be used for your assessments. Baseline margin, sales and net profit assumptions for the next 3 months are provided To cost the 3 proposals you must use the estimated Fixed Advertising Cost, Incentive s Unit (Margin Deterioration), and Historical Sales Uplifts provided to determine the expected financial benefit of each proposal Given that the economy has seen some turbulent reactions resulting from Covid-19 (i.e. stay at home orders, business restrictions, company layoffs, etc.), the historical sales uplifts may not be consistent with how the customers will react in today's environment, which could be a risk to the projected financial outcomes. As you evaluate your team's proposal be prepared to explain why your recommendation is the best course of action, considering both your internal projections as well any adjustments you identified based on the current market conditions. In addition, also be prepared to support why you decided against the other proposals that were not chosen. Costing Schedule (Template): TORM Sot Mai SEST Pro IN M 1.000 ON 15.500 162 15 A IS 3,000 23.500 s 6.000 1.300 1612 1300 100 5 16 S Men Wur compte probeert of a rate and even tweet pop Fm M Net Profit Whaton Berline vesten NOU . NOVO 5 OV $ 10 There are three proposals being evaluated to improve vehicle outputs and cost structure. Each proposal will require you to cost out the total impact to Stellantis and you must choose only one to recommend to the Leadership Team. Proposal Increase Vehicle Production Description Adding 3 Sundays to shift per Sunday) at Ram Plant X This proposal wil cost the company on average $2.0M in labor cost to produce 1000 units per each Sunday shift B Cut S/M from Preventive Maintenance budget. Ram Plant X will be running a risk of plant downtime due to equipment failure No Volume Impact Cost Saving Only Investment will be a lump sumption payment to suppler nverse SM of capital equipment at Stellant supplier facility to increase production of ready to use part. This 20 Memo: Included below is a costing schedule that can be used for your assessments Baseline margin, production and net profit assumptions for the next 3 months is provided. To cost the 3 proposals you must use the estimated preventive maintenance cost saving, capital equipment investment, and Sunday overtime cost to determine the expected financial benefit/cost of each proposal 11 Given the production has been affected by Covid-19 (i.e. social distancing, additional safety protocol, higher absenteeism), the actual production volume might not reflect historical production volume trends. This could be a risk to the projected financial outcomes. As you evaluate your team's proposal, be prepared to explain why your recommendation is the best course of action, based on what you internally evaluated as well any considerations or adjustments you determined based on the current market environment. In addition, also be prepared to support why you decided against the other proposals that were not chosen. Costing Schedule (Template): Proposal Content Net Profit Production Cost Net Proposal un Beseline 5 10.000 A 5 30 000 6 30.000 30.000 Pation Fort Total Monte Vehich Production Production AST ON 50.000 BOD Mill 600.0 600.0 Proposal cost to ICA 5 5 3 Me w Runon Baseline investment SM TRON 0.0 DIV/0! $ / $ DIV/0! 0.000 30.000 Meme when conting the proposals reflectie/ certies and revenue/profispositive pures Inspired Formula 1 Guidelines: Each team will have 2 hrs, to prepare a 15 min. presentation, which will summarize their "Commercial" and "Industrial" recommendations to be taken in the immediate term to combat Stellantis challenges exposed by the global pandemic. The recommendation(s) should be supported by the collective input from all group members. Be prepared to discuss the implications and pros/cons of the improvements you are recommending as well as the assumptions & financial data you provide Your homework in advance of the interview day is to conduct research and bring with you data and relevant information to help you develop the recommendation with the group All team members are required to participate in the preparation, development, and presentation to the leadership team. Recommendations: Clearly articulate what factors drove your decision making process. Consider the strengths, weaknesses, opportunities and threats of your proposal as you prepare to support your findings As you provide recommendations, ensure that both the short term and long term impact of your proposed actions are considered. Commercial Template Industrial Template Propoulosting Sales Fest Historical Sales Total 3 Month Unlitt Sales FCST Fixed Adv. Cost locative Impact Ays. Nes (SM Margin 15 mi) Proposal Net Profit AUSMils) Praneo Couro ECLISMAN Meno: Net Profit HXLIV Baseline (SMile) Return on Investment (ROI) Baseline X1600 19,500 167.7 0 Oxr A 8,600 19.500 1673 0 8,600 0 8,600 19.500 167.7 0 Memark. When coming the proposals reflect all expertos encontrar megurive and revenue prostorings as positiw figures Inputs Reywired Formula Commercial Template Industrial Template Input Formule Formula 1 Formula Formule Formula 4 1- -1 Formula 1 Proposal Casting Production (SMils) Prensa Preston Foreca Vehicle Total 3 Month Production Prestation ECST 0%. 60,000 000 Ave Net Martin is ni 10,000 10000 Net Profit SMil) 600 Pyal Cost to ECAS We' HAL Return on Baseline Investment (SM) ROD 0 0.06 Baseline A 600 0 DOOR B 10.000 600 0 C 10.000 MODO 600 0 Memohon costing the proposals reflect all aspen Rossous as negative figures and receita kawings es positive figures, Inputs Required Formule