With Stellantis trying to sort out what to do with its 14 brands, i.e. which ones to keep, CEO Carlos Tavares dismissed the notion that the company is looking to add another: French automaker Renault.
Stellantis CEO Carlos Tavares refuted rumors about a merger between the company and French automaker Renault.
Tavares was in France at a company facility, ahead of the Paris Motor Show next week as reports began to circulate about a potential link up between Stellantis and Renault. He quickly denied the notion when asked, calling the idea “pure speculation,” according to an Automotive News report.
Speaking at a Renault event in Paris on the same day, Renault CEO Luca de Meo declined to comment on what he described as “rumors.” Those rumors are the result of a story in an Italian newspaper, Il Sole 24 Ore, that discussions about a potential merger have increased. The talks center around using economies of scale to reduce costs and improve margins.
Scuttlebutt
The current round of rumors likely got their start courtesy of reports earlier this year that the French government was studying plans for a merger between the two companies. The French government is Renault’s largest shareholder along with Nissan, and also has a stake in Stellantis, which was a merger of Fiat Chrysler and France’s PSA Group.
It doesn’t help that Stellantis seems to be surrounded by nothing but bad results, difficult relationships, and speculation about Tavares. In fact, Stellantis officials have already been forced to deny rumors about selling parts of the company to other automakers. China’s BYD was thought to be making a play for the Chrysler brand earlier this year before Tavares and other senior officials stamped out that rumor.
UAW President Shawn Fain, rallying workers at the Sterling Heights Assembly Plant last year, claims Stellantis is violating terms of the new contract.
On top of that, Stellantis sales fell 20% during the third quarter in the U.S. and are down 17% through the first nine months of the year compared to 2023. The Q3 drop came despite aggressive incentives that moved about 50,000 vehicles off dealer lots — in short, it could have been much worse.
The incentives will remain in place to help dealers clear out back inventory of new vehicles as the 2025 models roll into the showroom. “We continue to take the necessary actions to drive sales and prepare our dealer network and consumers for the arrival of 2025 models,” said Matt Thompson, head of U.S. retail sales for Stellantis.
Fighting with the union
On top of the issues its facing sales, the automaker is feuding with the UAW, which claims the automaker is backing out of agreements made in the most recent contract. Stellantis officials denied the claims made by UAW President Shawn Fain that the company will close the Belvidere, Illinois plant it promised to reopen with an electric vehicle.
Officials claim the company is simply delaying the opening due to “market conditions.” Fain doesn’t believe it and is threatening a strike. The issues are so concerning the company issued a press release offering a point-by-point rebuttal of union claims.
The Belvidere Assembly Plant shut in early 2023 when production of the slow-selling Jeep Cherokee ended.
“The company confirmed a delay — not a cancellation, as Fain recently suggested — of the plans for the Belvidere plant allocations,” the company said in the statement. “This decision is consistent with the current challenging automotive landscape and the plain language of Letter 311. The company remains committed to investing in the U.S. to create jobs and support our communities.”
Stellantis also said the union doesn’t have the right to strike under the terms of agreement signed last year and that any move to walk away from the line will only harm the company.
“Let me be crystal clear, we have abided by and will continue to abide by the 2023 collective bargaining agreement,” said Carlos Zarlenga, COO, Stellantis North America. “It is in everyone’s best interest to have a healthy company that can compete in a global marketplace. This is a time for us to work together, not against each other.”
More Stellantis Stories
- Stellantis Set to Launch Layoffs Next Month — Even as it Faces Strike Threat
- Stellantis, UAW Square Off Over Commitments Made During Strike
- Stellantis Defensive After Dealers Urgently Voice Their Concerns As Sales Tank
Staying or not?
On top of all this, there is a growing question about whether or not Tavares will even be around long enough to turn the company around. Chairman John Elkann recently noted the company is looking at potential replacements for Tavares as his contract expires in 2026.
However, if the company continues to struggle financially, he might not enjoy the option of renewing his contractive, which provides more than $35 million in compensation annually.
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