Stellantis CEO Carlos Tavares is meeting with top U.S. executives this week.
With North American sales and earnings on the slide, Stellantis faces a number of challenges that have already led to some major changes in upper management and layoffs on the factory floor. And CEO Carlos Tavares is under mounting pressure to find a fix, reports Headlight.News.
Stellantis CEO Carlos Tavares is in Detroit this week, an extra trip on top of his usual stateside visits every four-to-six weeks. But this is no pleasure call. The three-day jaunt is meant to repair the European automaker’s struggling North American operations, which fund Stellantis’ Old World brands, many of which appear to be in even worse shape than their American counterparts, according to a Reuters report.
The report cites two unnamed sources, who say Tavares is looking to soothe employees and investors in the wake of the automaker’s first half results. Tavares described them as “humbling” and admitted his own “arrogance” contributed to the poor results during an earnings call. Even so, investors haven’t been assuaged, the company’s share price fallen by nearly half so far this year.
Tavares will have a busy schedule during this trip, among other things dropping in on Detroit-area dealers, as well as a local plant — although which one hasn’t been identified. More critically, he will meet with top executives in the suburb of Auburn Hills, the automaker’s U.S. headquarters. There, Tavares plans to help pull together a new strategy by week’s end. Notably, he will have a very different team in place from the one he worked with earlier this year. A handful of senior executives, including the head of the Dodge brand and the company’s sales chief, have been replaced since the beginning of summer.
LOTS OF CARS ON DEALER LOTS
According to Cox Automotive, 30% of Dodge’s 131-day inventory consists of 2023 models, such as this Dodge Hornet GT.
The visit comes as Stellantis inventories are some of the industry’s largest as of July 31st, with Chrysler facing the smallest supply at 105 days, followed by Alfa Romeo’s 126-day supply, Jeep’s 129-day supply, Dodge’s 131-day supply and Ram with twice the industry average. A 60-day supply is considered average.
And while inventories have been growing, Stellantis’ bulging dealer lots come as Toyota has a 29-day supply, Honda a 43-day supply, Chevrolet a 64-day supply and Hyundai a 68-day supply – the latter being the current industry average.
But look closer, and Stellantis’ problems are worse than merely too many vehicles. According to a recent report by Cox Automotive, Stellantis still has too many 2023 models on its lots even as the 2024 model year is wrapping up. About 30% of Dodge’s inventories are 2023 models, while Chrysler has 14% of prior model year vehicles.
More Stellantis News
- Stellantis CEO Blames “Arrogance” for Company’s Problems
- UAW Chief Threatens New Strike at Stellantis
- BYD rumored to be intersted in acquiring Chrysler brand
WHICH BRANDS GET THE AXE?
During an appearance on Bloomberg TV this month, Tavares said all 14 Stellantis car brands are profitable. But some are just barely in the black, notably Chrysler — which has but one product, the Pacifica minivan, to sell — noted Sam Abuelsamid, prinicipal auto analyst for Guidehouse Insight.
While Tavares has said all 14 brands have a future, he warned in late July that he will not hesitate to close under-performing brands. “If they don’t make money, we’ll shut them down,” he told reporters at the time. “We cannot afford to have brands that do not make money.”
The UAW’s Shawn Fain is promising a strike if Stellantis doesn’t live up to its labor agreement.
Certainly Lancia and DS fit the bill, while here in the states, many wonder about Chrysler’s future given it’s down to one model.
CEO Himself is in the Black
None of this has affected Tavares’ pay, even as it has affected many others. He received a $40.6 million pay package last year – up 56% from the year prior. Meanwhile, Stellantis is offering voluntary buyouts to U.S. salaried employees, and is laying off 2,450 workers from its Warren Truck assembly plant as it ends production of the Ram 1500 Classic.
As you can imagine, none of this has sat well with United Auto Workers President Shawn Fain, who is insisting the company keep its investment promises outlined in the company’s latest labor contract with the union, which was agreed to late last year. Otherwise, don’t be surprised if Fain calls a strike of headcount at Stellantis plants falls faster than Fiat’s U.S. sales.
Disgusting; the brands of the former Chrysler Motors Corp fund the vast majority of Stellantis from top to bottom, yet the entity itself is being called a “European” car maker, not a multi national, while at the same time the “Americans” are the problem; here’s two solutions say “au revoir” to Tavares and get a CEO in that actually gives a **it or spin off the North American operation with the margin of revenue it brings to the the table, which is nearly entirely 100%, and return it to the Pentastar, where it belongs; let’s see how well your Euro trash brands fair with out Chrysler, Dodge, Jeep and Ram and Mopar
Fain has done little but to screw his own union membership. Demands after demands, making auto workers, (many in minimal skilled positions), some of the highest paid industry workers the nation, while failing to see the big picture: Falling sales because of the present economy + the high retail cost of new vehicles = industry cut backs.
Actually, the economy is in solid shape, more job growth than seen in decades. Inflation has been an issue but has dropped in recent months. High interest rates are one issue that has hurt auto sales, as have price increases. Do realize that labor accounts for less than 10% of total production costs.
These points are separate from whether Fain is or isn’t doing well by workers.
He hasn’t given Chrysler any new vehicles, just one mini van is left, and he expects them to increase sales. The man is incompetent. Dodge is introducing a new Charger, 2 and 4 door models. Both will be all electric for the first year with ICE powered cars to follow in a year. Electrics aren’t selling. Taveres is delusional. The company should split and go back to FIAT-CHRYSLER.