Stellantis rejects desperate bid to rescue legendary Detroit brands

Multinational automaker Stellantis (STLA) is going through a rough patch following disappointing first-half earnings results disclosed in late July 2024.

Since then, the corporate has been aggressively implementing cost-cutting measures just like voluntary buyouts for white-collar employees and layoffs of more than 2,450 assembly line workers following the discontinuation of the Ram 1500 Classic.

With more than 14 brands less than its belt, starting from European staples like Fiat to American brands like Chrysler and Dodge, Stellantis' success rests on some players so so you might drag them down. Knowing this, Tavares gave a stern warning to the many brands in its portfolio so so you might probably be acting as dead weight.

"In the event that they are not making money, we'll shut them down," Tavares threatened at some point of the choice. "We shouldn't find the money for to have brands that are not making money."

Though Stellantis has shut down speculation in regards to the fate of certain brands like Maserati, a fresh development has emerged end result of the this fact of the an out of doors player butting into its business.

A response to Rhodes' manifesto

On August 22, Walter B. Rhodes, the comprehensive-grandson of Chrysler founder Walter P. Chrysler, wrote an open letter in search of to assemble investors and workers to collectively save Chrysler, Dodge, Jeep, and Ram from what he sees as Stellantis's mismanagement.

In a plea in both written and video form, Rhodes highlighted Chrysler's place within American automotive history and criticized Stellantis' leadership for being "out of touch" with American buyers and now not giving the brand enough attention.

"The Chrysler brand, once an emblem of innovation and American ingenuity, is now susceptible to fading into obscurity end result of the this fact of the what I accept as true with are poor decisions and mismanagement by its current owners, Stellantis," Rhodes wrote.

Related: Chrysler heir shares plan to rescue his family's brand from Stellantis

On the opposite hand, on August 30, Stellantis released a statement that in some way responds to Rhode and reaffirms its position over the brands.

“Stellantis acknowledges the interest in its North American brands and reaffirms the Company’s commitment to its entire portfolio of 14 powerful, iconic brands, which were each given a ten-year timeframe to construct a profitable and sustainable business,” the statement said.

“The image of the Jeep and Ram brands, Chrysler and Dodge are at the forefront of Stellantis’ transformation to clean mobility, benefitting from the group’s cutting-edge technology and scale. The Company is now not pursuing splitting off any of its brands.”

It has to be important to notice that it truly is now not the first time that Rhodes has intervened on the sort of manner. In December 2020, Rhodes requested that the then-Fiat Chrysler Automobiles (FCA) reconsider merging with the Peugeot company to form at this time time's Stellantis.

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He proposed changing the corporate's name to Chrysler-Dodge-Jeep-Ram Corporation and moving its headquarters to the U. S., among other changes.

Unfortunately, Rhode's plan has now not come to fruition.

In line with many of the most up-to-date rejection, Rhodes told the Detroit Free Press that he became disappointed to in finding out in regards to the news through a statement to the media in place of a person at Stellantis contacting him.

"Since I sent the proposal to Carlos Tavares, and Christine Feuell (CEO of Chrysler Group), I expected the courtesy of their reply to get back without delay to me," Rhodes said. "I am hoping that during the future we can have direct communications, or as a minimum copied. I should be able to have a proper reply on Tuesday."

In a fresh statement published on Mopar blog Mopar Insiders, Rhodes clarified his intent with the unique letter and proposal to Stellantis, noting that he would now not need to in finding to own the brands himself, but potentially through an employee-owner system.

“My letter to Stellantis gave the inaccurate impression that I in my view shop for back Chrysler and the affiliated brands. My ultimate goal is for this company to be brought back to The americaa. less than American ownership. In my opinion, worthwhile path forward is maybe for the union to alter into involved with employee ownership.”

Stellantis N.V., which trades on the New York Stock Exchange as STLA, is down four.seventy four% from the hole bell, trading at $15.ninety eight at the time of writing.

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