Is Stellantis In Trouble? U.S. Dealers Union Speak Out Against CEO Carlos Tavares
Recently, the U.S. dealer network of Stellantis, led by CEO Carlos Tavares, has been facing criticism for the company’s declining sales, factory production cuts, and other decisions deemed harmful to the automaker’s business. In a bold move, Kevin Farrish, the head of Stellantis’ U.S. dealer council, condemned Tavares for prioritizing profits over sales, market share, and the reputation of brands like Chrysler, Dodge, Jeep, and Ram.
Featuring 2,600 U.S. dealers, the dealer council penned an open letter to Tavares, expressing concerns about the company’s operations for the past two years. Farrish accused Tavares of prioritizing short-term profits at the cost of the company’s long-term success, leading to a rapid decline in brand value. The negative impact has been evident with plummeting market share, stock prices, plant closures, layoffs, and executive departures.
Stellantis responded to the criticism, highlighting a 21% increase in August sales over July and a structured action plan developed in collaboration with the dealer body. The company emphasized a collaborative approach to problem-solving and refrained from engaging in public disputes. Despite reporting a record profit in 2023, Stellantis experienced a 48% decrease in net profit in the first half of the year compared to the same period in 2023.
The stock performance of Stellantis has been on a downward trend, with shares declining by approximately 36% this year to around $15. Tavares’ strategic initiatives aimed at increasing profits and revenue by 2030 have led to controversial cost-cutting measures, including reshaping the supply chain, reducing headcount, and cutting vehicle production at plants.
Even UAW President Shawn Fain has publicly criticized Tavares, accusing him of consumer price gouging and failing to honor parts of the union’s labor contract with the automaker. The UAW, representing around 38,000 Stellantis employees, is set to hold a rally condemning the alleged mismanagement at the company.
As the U.S. sales for Stellantis have shown a consistent decline since 2018, it is evident that the company is facing challenges in a market where overall new light-duty vehicle sales are on the rise. With a continued focus on profit-driven strategies, Stellantis finds itself at a critical juncture, where balancing short-term gains with long-term sustainability is key to its future success.
Stay tuned for more updates on the evolving situation at Stellantis and the impact of these developments on the broader automotive industry. Follow Extreme Investor Network for the latest insights, analysis, and expert opinions on the business news that matters to you.