Stellantis is looking for a new CEO amid fervent pressure from the auto industry

The multinational car manufacturer Stellantis (STLA) The parent company that includes 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 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.

In North America, Stellantis has been aggressive in its cost-cutting measures to recoup what it has lost, not limited to moves that include voluntary buyouts for white-collar workers and layoffs of more than 2,450 front-line workers. assembly following program interruption. Ram 1500 Classic.

Carlos Tavares, executive director of Stellantis NV

Bloomberg/Getty Images

Stellantis CEO Search

According to a new report from Bloomberg, Stellantis has begun its search for a potential successor to CEO Carlos Tavares.

Sources who have spoken to the media say Stellantis president John Elkann, who will lead the search, has no immediate plans to replace Tavares at the helm. The current CEO will be considered in the search process should he decide to renew his contract in early 2026.

Although Stellantis confirmed to Bloomberg that the search is taking place, they say it is part of regular succession planning.

A Stellantis spokesman said it was “normal” for board members to consider the automaker’s succession planning, given the CEO’s important role in the company. They say the lawsuit should not have “an impact on future discussions” because the possibility remains that Tavares will retain his position.

The problem of North America

But while Tavares reigns, anonymous sources tell Bloomberg that Stellantis chairman Elkann is not happy with the work they are doing in one of its most profitable and strategic regions where it sells cars: North America.

For Stellantis, the North American market, particularly the United States, has been hostile recently, full of pushback at every turn. Here, the blame is not only aimed at the automaker, but also at one particular person: Stellantis CEO Carlos Tavares.

DEALERS

In an open letter dated Sept. 10, leaders representing the U.S. dealer network of Stellantis brands waxed poetic on CEO Carlos Tavares.

Dealers blamed Tavares for the “rapid degradation” of brands like Dodge, Ram and Jeep and begged him for support to help clear excess and old inventory from their lots.

“For over two years, the US Stellantis 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.

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

Related: Stellantis applauds after US dealers blame CEO for ‘disaster’

In addition, dealers accused Tavares of prioritizing short-term, profit-boosting decisions that were made at the expense of his American brands – Jeep, Ram, Dodge and Chrysler.

In response, Stellantis representatives responded, appearing to have developed an “action plan” that “yielded 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 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.

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Shawn Fain and the UAW

In a speech streamed live 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 not holding up its end of the deal ended in October. 2023.

Specifically, the Union accuses the automaker of intentionally delaying the reopening of the Belvidere assembly plant in Illinois and moving production of the Dodge Durango across the border, which violates contractual terms the two agreed to.

“We are 100 percent within our right and within our power to strike if necessary,” Fain said. “We are prepared to go on strike to make Stellantis keep his promise.”

Related: UAW President Shawn Fain Hits Stellantis Where It Hurts

In a Sept. 23 press release, Stellantis said its director of North American operations, Carlos Zarlenga, sent Fain an email aggressively refuting and “setting the record straight” about his allegations, honoring the commitment to comply with the terms of the contract established in October 2023.

In his defense, Stellantis pointed out that the union “agreed to language that expressly allows the company to alter product investments and employment levels.”

Specifically, the automaker states that the “investments and allocations” that were outlined to the UAW “are subject to approval by the Stellantis Product Allocation Committee and are dependent on plant performance, changes in market conditions and customer demand that continues to generate sustainable volumes and profitable”. for the relevant installation.”

“Investments and deadlines are not absolute guaranteesas Fain has wrongly and repeatedly characterized, but it depends on numerous factors, including market conditions,” Stellantis said in his statement.

The steering wheel of a Jeep Wrangler during the New York International Auto Show (NYIAS) in New York, USA

Bloomberg/Getty Images

The automaker also cited the current “undeniable market volatility, especially as the industry moves to an electrified future,” noting that many automakers have returned to or are revising their plans for electric vehicles.

Besides addressing plans for the Belvedere, Stellantis said he has not made an announcement regarding the production location of the next-generation Dodge Durango. They said they “actually announced about 30 percent of the nearly $19 billion that is included in the 2023 deal, not just 2 percent as Fain claims.”

Although the multinational automaker expressed its displeasure, 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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