The multinational automaker Stellantis (STLA) , the parent company encompassing 14 well-known car brands from Italy’s Fiat and Maserati, France’s Citroën and Peugeot, as well as Jeep, Chrysler and Dodge, has not been in good shape since reporting dismal earnings in late July 2024.
During the earnings call, CEO Carlos Tavares blamed a “challenging industry context” and its own “operational issues” for the challenges it has been facing.
“We have significant work to do, especially in North America, to maximize our long-term potential,” Tavares said.
In North America, Stellantis has been aggressive in its cost-cutting measures to make back what it has lost, not limited to moves that include voluntary buyouts for white-collar employees and layoffs of more than 2,450 assembly-line workers following the discontinuation of the Ram 1500 Classic.
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The Stellantis CEO Search
According to a new report from Bloomberg, Stellantis has started its search for a potential successor for CEO Carlos Tavares.
Sources who have spoken to the outlet say that Stellantis Chairman John Elkann — who will be leading the search, has no immediate plans to replace Tavares at the helm. The current CEO will be considered in the search process in the event he decides to renew his contract in early 2026.
Though Stellantis has confirmed to Bloomberg that the search is happening, they defend that it is part of the regular succession planning.
A Stellantis spokesperson said that it is “normal” for board members to consider the automaker’s succession planning, considering the CEO’s important role in the company. They say that the process shouldn’t have “an impact on future discussions,” as the possibility of Tavares holding onto his position still remains.
The North American problem
But while Tavares reigns, unnamed sources tell Bloomberg that Stellantis Chairman Elkann is not happy with the job they are doing in one of its most profitable and strategic regions, where it sells cars: North America.
For Stellantis, the North American market, specifically the United States, has been hostile recently, rife with pushback at virtually every turn. Here, the blame is not just targeted at the automaker but also one specific person: Stellantis CEO Carlos Tavares.
The Dealers
In an open letter dated September 10, leaders representing the U.S. dealer network of Stellantis brands poetically chastised CEO Carlos Tavares.
The dealers blamed Tavares for the “rapid degradation” of brands like Dodge, Ram, and Jeep and implored him for support to help clear excess and old inventory off of their lots.
“For over two years now, the U.S. Stellantis National Dealer Council has been sounding this alarm to your US executive team, warning them that the course you had set for Stellantis was going to be a disaster in the long run,” the dealers wrote.
“A disaster not just for us, but for everyone involved — and now that disaster has arrived.”
Related: Stellantis claps back after U.S. dealers blame CEO for ‘disaster’
Furthermore, the dealers accused Tavares of prioritizing short-term, profit-boosting decisions that were made at the expense of its American marques—Jeep, Ram, Dodge, and Chrysler.
In response, Stellantis representatives fired back, defending that it developed an “action plan” that has “shown results” in reducing dealer inventory and increasing market share.
But more critically, the automaker reprimanded the National Dealer Council, criticizing their move as unprofessional.
“At Stellantis, we don’t believe that public personal attacks, such as the one in the open letter from the NDC president against our CEO, are the most effective way to solve problems,” Stellantis said in a statement.
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Shawn Fain and the UAW
In a speech live-streamed on YouTube on September 17, United Auto Workers (UAW) President Shawn Fain said the union is prepared to take “strike action” against Stellantis because it sees the automaker failing to uphold its end of the deal made in October 2023.
Specifically, the Union accuses the automaker of purposely delaying the reopening of the Belvidere assembly plant in Illinois and moving production of the Dodge Durango across the border, which violates the contract terms the two agreed to.
“We are 100% within our rights and within our power to take strike action if necessary,” Fain said. “We are prepared to take strike action to make Stellantis keep the promise.”
Related: UAW President Shawn Fain is hitting Stellantis where it hurts
In a news release dated Sept. 23, Stellantis said that its North American Chief Operating Officer Carlos Zarlenga sent Fain an email aggressively refuting and “setting the record straight” about his accusations, standing by its commitment to upholding the conditions in the contract set in Oct. 2023.
In its defense, Stellantis pointed out that the union “agreed to language that expressly allows the company to modify product investments and employment levels.”
Specifically, the automaker states that “investments and allocations” that were outlined to the UAW “are subject to approval by the Stellantis product Allocation Committee and contingent upon plant performance, changes in market conditions, and customer demand continuing to generate sustainable and profitable volumes’ for the relevant facility.”
“The investments and timelines are not absolute guarantees, as Fain has wrongly and repeatedly characterized, but contingent upon numerous factors, including market conditions,” Stellantis said in its release.
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The automaker also mentioned the current “indisputable volatility in the market, especially as the industry transitions to an electrified future,” noting that many automakers have walked back or are revisiting their EV plans.
Besides addressing the plans for Belvedere, Stellantis said it hasn’t made an announcement regarding the production location of the next-generation Dodge Durango. They said that they “have actually announced about 30% of the nearly $19 billion that is included in the 2023 agreement, not just 2% as Fain claims.”
Though the multinational automaker aired out its grievances, it reiterated that CEO Carlos Tavares and his North American team are ready to meet with the union and explain “how these actions are appropriate under the CBA [Collective Bargaining Agreement].”
Stellantis NV, which trades on the New York Stock Exchange as STLA, is up 0.71% from the opening bell, trading at $15.56 per share at the time of writing.
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