Stellantis claps back after U.S. dealers blame CEO for 'disaster'

Multinational automaker Stellantis (STLA) , the parent company of well-known American car brands Jeep, Dodge, Chrysler and Ram, has been going through the motions since it reported disappointing first-half of earnings ends up in late July 2024.

During the earnings call, CEO Carlos Tavares blamed a "demanding industry context" and its own "operational issues" for the challenges it has been facing.

"We now have significant work to do, specifically in North The americaa., to maximize our long-term potential," Tavares said.

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The reason is, report's publication, the company has aggressively implemented cost-cutting measures, akin to voluntary buyouts for white-collar employees and layoffs of greater than 2,450 assembly-line workers following the discontinuation of the Ram 1500 Classic.

Additionally, the automaker also rejected a desperate bid from a Chrysler family heir to take back the Jeep, Dodge, Chrysler, and Ram brands.

Stellantis dealers write back

As the people bearing the brunt of the bad situation from the ground level, leaders representing the U.S. dealer network of Stellantis brands chastised CEO Carlos Tavares in an open letter directed at him.

Within the letter dated September 10, the dealers put Tavares front and center for the “rapid degradation” of brands like Dodge, Ram, and Jeep, urging him to spend more to help clear excess and old inventory off of their a lot.

“For over two years now, the U.S. Stellantis National Dealer Council has been sounding this alarm to your US executive team, warning them that the course you had set for Stellantis became going to be a disaster inside the end,” the dealers wrote in their letter.

“A disaster now not just for us, but for every person involved — and now that disaster has arrived.”

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

The dealers note that such moves have been made on the expense of shrinking Stellantis's market share and hurting its American marques—Jeep, Ram, Dodge, and Chrysler.

"The market share of your brands has been slashed nearly in half of, Stellantis stock price is tumbling, flowers are closing, layoffs are rampant, and key executives fleeing the company," the dealers wrote. "Investor complaints, supplier complaints, strikes–the fallout is mounting. Your own distribution network, your dealer body, has been left in an anemic and diminished state."

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Stellantis writes back

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

It mentioned that in August 2024, it developed an "action plan" with its dealers "that has already shown results."

Consistent with the automaker, a new strategy it developed with dealers resulted in August 2024 sales being up 21% over July, its market share increasing by Zero.7 points, and dealer inventory reduced "by approximately 10% in total."

Additionally, the automaker reprimanded the National Dealer Council, noting that this kind of letter became now not how they do business.

"At Stellantis, we don’t accept as true with that public personal attacks, akin to the one inside the open letter from the NDC president against our CEO, are possibly the precise on account of solve problems," Stellantis said in a statement.

"We now have started a path to have the flexibleness to prove a hit. We will continue to work with our dealers to keep away from any public disputes to have the flexibleness to delay our ability to deliver results."

Stellantis N.V., which trades on the New York Stock Exchange as STLA, is down 1.fifty eight% from the outlet bell, trading at $14.97 on the time of writing.

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