Stellantis applauds after US dealers blame CEO for ‘disaster’

The multinational car manufacturer Stellantis (STLA) the parent company of famous American car brands Jeep, Dodge, Chrysler and Ram has been going through the motions since reporting disappointing first-half 2024 earnings results in late July 2024.

During the earnings call, CEO Carlos Tavares blamed a “challenging industrial context” and his own “operational issues” for the challenges he faces.

“We have significant work to do, particularly in North America, to maximize our long-term potential,” Tavares said.

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Since the report’s release, 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.

In addition, the automaker also rejected a desperate bid by a Chrysler family heir to take over the Jeep, Dodge, Chrysler and Ram brands.

Jeep vehicles are delivered to a dealer on June 20, 2024 in Chicago, Illinois.

Scott Olson/Getty Images

Stellantis dealers respond

As people bearing the brunt of the poor situation on the ground, leaders representing the US dealer network of Stellantis brands rebuked CEO Carlos Tavares in an open letter to him.

In the Sept. 10 letter, the dealers singled out Tavares for the “rapid degradation” of brands like Dodge, Ram and Jeep, urging him to spend more to clear excess and old inventory from their lots .

“For over two years, the Stellantis US National Dealer Council has sounded this alarm to your US executive team, warning them that the course you have set for Stellantis will be a long-term disaster,” the dealers wrote in the letter their.

“A disaster not just for us, but for everyone involved – and now that disaster has arrived.”

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Additionally, dealers accused Tavares of prioritizing short-term decisions that boosted profits, allowing him to take home more than $40 million in profits in 2023.

Dealers note that such moves were made at the expense of shrinking Stellantis’ market share and hurting its American brands – Jeep, Ram, Dodge and Chrysler.

“The market share of your brands has been cut in half, the Stellantis share price is falling, factories are closing, layoffs are rife and key executives are fleeing the company,” the dealers wrote. “Investor lawsuits, supplier lawsuits, strikes – the consequences are mounting. Your distribution network, the dealer body, has been left in an anemic and diminished state”.

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Stellantis answers

In a response to the letter from the National Council of Stellantis Dealers, Stellantis defended its efforts to help boost sales.

It noted that in August 2024 it had drawn up an “action plan” with its dealers “which has already produced results”.

According to the automaker, a new strategy it developed with dealers led to sales growth in August 2024 by 21% compared to July, with its market share increasing by 0.7 points and dealer inventory reduced “by about 10% in total”.

In addition, the automaker reprimanded the National Dealer Council, stating that such a letter was not the way they do business.

“At Stellantis, we do not believe that personal public attacks, such as the one in the NDC president’s open letter against our CEO, are the most effective way to solve problems,” Stellantis said in a statement.

“We have started a path that will prove successful. We will continue to work with our dealers to avoid any public disputes that will delay our ability to achieve results.”

Stellantis NV, which trades on the New York Stock Exchange as STLA, is down 1.58% from the opening bell, trading at $14.97 at the time of writing.

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