Stellantis rejects desperate bid to save legendary Detroit brands

The multinational car manufacturer Stellantis (STLA) is going through a tough time following disappointing first-half earnings results revealed at the end of July 2024.

Since then, the company has aggressively implemented cost-cutting measures, such as voluntary buyouts for white-collar workers and layoffs of more than 2,450 assembly line workers following the discontinuation of the Ram 1500 Classic.

With more than 14 brands under its belt, from European staples like Fiat to American marques like Chrysler and Dodge, Stellantis’ success rests on a few players that could drag them down. Knowing this, Tavares issued a stern warning to the many brands in his portfolio that could act as dead weight.

“If they’re not making money, we’re shutting them down,” Tavares threatened during the call. “We can’t afford to have brands that don’t make money.”

Although Stellantis has shut down speculation about the fate of certain brands such as Maserati, a new development has emerged due to an outside player intervening in its business.

Chrysler 300C

GEOFF ROBINS/Getty Images

A response to the Rhodes manifesto

On August 22, Walter B. Rhodes, the great-grandson of Chrysler founder Walter P. Chrysler, wrote an open letter seeking to rally investors and workers to collectively save Chrysler, Dodge, Jeep and Ram from what he sees as being the bad management of Stellantis.

In both a written and video plea, Rhodes highlighted Chrysler’s place in American automotive history and criticized Stellantis’ management for not being “out of touch” with American buyers and paying enough attention to the brand.

“The Chrysler brand, once a symbol of American innovation and ingenuity, is now at risk of fading into obscurity due to what I believe are poor decisions and mismanagement by its current owners, the Stellantis,” Rhodes wrote.

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However, on August 30, Stellantis released a statement indirectly responding to Rhode and reaffirming its stance on brands.

“Stellantis recognizes the interest in its North American brands and reaffirms the company’s commitment to its entire portfolio of 14 strong, iconic brands, each of which has been given a 10-year time frame to build a profitable and sustainable business,” it said. shows in the statement.

“Like the Jeep and Ram brands, Chrysler and Dodge are at the forefront of Stellantis’ transformation to clean mobility, benefiting from the group’s cutting-edge technology and scale. The company is not looking to separate any of its brands.”

It is important to note that this is not the first time that Rhodes has intervened in such a manner. In December 2020, Rhodes requested that the then Fiat Chrysler Automobiles (FCA) reconsider its merger with the Peugeot company to form today’s Stellantis.

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He proposed changing the company’s name to Chrysler-Dodge-Jeep-Ram Corporation and moving its headquarters to the United States, among other changes.

Unfortunately, Rhode’s plan didn’t work out.

In response to the latest pushback, Rhodes told the Detroit Free Press that he was disappointed to learn of the news through a statement to the media instead of being contacted by someone from Stellantis.

“Since I sent the proposal to (Chrysler Group CEO) Carlos Tavares and Christine Feuell, I expected their response to come directly to me,” Rhodes said. “I hope that in the future we will have direct communications, or at least copied. I will have an official answer on Tuesday”.

In a new statement posted on Mopar’s Mopar Insiders blog, Rhodes clarified his intent with the letter and original proposal to Stellantis, noting that he is not looking to own the brands himself, but potentially through an employee-owner system.

“My letter to Stellantis gave the wrong impression that I personally wanted to buy back Chrysler and its affiliated brands. My ultimate goal is to bring this company back to America under American ownership. In my opinion, the best way forward is possibly for the union to get involved in employee ownership.”

Stellantis NV, which trades on the New York Stock Exchange as STLA, is down 4.74% from the opening bell, trading at $15.98 at the time of writing.

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