Stellantis seeks new CEO amidst fervent auto industry pressure

The multinational automaker Stellantis (STLA) , the parent company encompassing 14 well-known car brands from Italy's Fiat and Maserati, France's Citroën and Peugeot, as well to Jeep, Chrysler and Dodge, has now not been in good shape since reporting dismal earnings in late July 2024.

The whole way throughout the earnings call, CEO Carlos Tavares blamed a "tough industry context" and its own "operational issues" for the challenges it has been facing.

"We have got significant work to do, in particular in North The u.s., to maximise our long-term potential," Tavares said.

In North The u.s., Stellantis has been aggressive in its cost-cutting measures to make back what it has lost, now not limited to moves that consist of voluntary buyouts for white-collar employees and layoffs of more than 2,450 assembly-line workers following the discontinuation of the Ram 1500 Classic.

The Stellantis CEO Search

In line with a fresh report from Bloomberg, Stellantis has started its are seeking for for a potential successor for CEO Carlos Tavares.

Sources who have spoken to the outlet say that Stellantis Chairman John Elkann — who may be leading the hunt, has no immediate plans to exchange Tavares at the helm. The present CEO may be thought of as within the hunt process within the event he decides to resume his contract in early 2026.

Though Stellantis has confirmed to Bloomberg that the hunt is going on, they defend that it truly is miles a bit of the regular succession planning.

A Stellantis spokesperson said that it truly is miles "normal" for board members to believe the automaker's succession planning, fascinated about the CEO's important role within the corporate. They say that the process shouldn't have "an impact on future discussions," because the chance of Tavares holding onto his position still remains to be.

The North American problem

But while Tavares reigns, unnamed sources tell Bloomberg that Stellantis Chairman Elkann is now not pleased with the job they are doing in one among its most profitable and strategic regions, where it sells cars: North The u.s..

For Stellantis, the North American market, specifically the U. S., has been hostile recently, rife with pushback at virtually every turn. Here, the blame is now not just targeted at the automaker but also one specific person: Stellantis CEO Carlos Tavares.

The Dealers

In an open letter dated September 10, leaders representing the U.S. dealer network of Stellantis brands poetically chastised CEO Carlos Tavares.

The dealers blamed Tavares for the “rapid degradation” of brands like Dodge, Ram, and Jeep and implored him for toughen to lend a hand clear excess and old inventory off of their tons.

“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 within the long term,” the dealers wrote.

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

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

Furthermore, the dealers accused Tavares of prioritizing short-term, profit-boosting decisions that were made at the expense of its American marques—Jeep, Ram, Dodge, and Chrysler.

In response, Stellantis representatives fired back, defending that it developed an "action plan" that has "shown results" in reducing dealer inventory and extending market share.

But more critically, the automaker reprimanded the National Dealer Council, criticizing their move as unprofessional.

"At Stellantis, we don’t accept as true with that public personal attacks, equivalent to the one within the open letter from the NDC president against our CEO, are top-of-the-line technique to solve problems," Stellantis said in a press release.

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Shawn Fain and the UAW

In a speech reside-streamed 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 failing to uphold its end of the deal made in October 2023.

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

“We are 100% within our rights and within our power to take strike action if necessary,” Fain said. “We are prepared to take strike action to make Stellantis keep the promise.”

Related: UAW President Shawn Fain is hitting Stellantis where it hurts

In a news free up dated Sept. 23, Stellantis said that its North American Chief Operating Officer Carlos Zarlenga sent Fain an email aggressively refuting and "setting the record straight” about his accusations, standing by its commitment to upholding the conditions within the contract set in Oct. 2023.

In its defense, Stellantis pointed out that the union "agreed to language that expressly lets within the corporate to change product investments and employment levels."

Specifically, the automaker states that "investments and allocations" that were outlined to the UAW "are subject to approval by the Stellantis product Allocation Committee and contingent upon plant performance, changes in market conditions, and customer demand continuing to generate sustainable and profitable volumes’ for the relevant facility."

"The investments and timelines are now not absolute guarantees, as Fain has wrongly and again and again characterized, but contingent upon tons of factors, including market conditions," Stellantis said in its free up.

The automaker also mentioned the current “indisputable volatility within the market, in particular because the industry transitions to an electrified future," noting that many automakers have walked back or are revisiting their EV plans.

Besides addressing the plans for Belvedere, Stellantis said it hasn’t made an announcement regarding the production location of the following-generation Dodge Durango. They said that they "have indubitably announced about 30% of the nearly $19 billion it truly is included within the 2023 agreement, now not just 2% as Fain claims.”

Though the multinational automaker aired out its grievances, 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.seventy one% from the outlet bell, trading at $15.fifty six per share at the time of writing.

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