Stellantis CEO Carlos Tavares speaks at the New York International Auto Show in Manhattan, New York, April 5, 2023.
David Dee Delgado | David Dee Delgado Reuters
Detroit – StrantisU.S. dealer networks have joined the United Auto Workers in criticizing Chief Executive Carlos Tavares over recent sales declines, factory cuts and other decisions they say are detrimental to the automaker’s business .
In an open letter to Tavares this week, Kevin Farrish, president of the Stratis U.S. Dealer Council, chastised the CEO for prioritizing company profits over Sales, market share and reputation of Chrysler, Dodge, Jeep and Ram. The committee represents the company’s 2,600 U.S. dealers.
“Your brand’s market share has been slashed by nearly half, Stellantis stock price has plummeted, factories are closing, layoffs are rampant, key executives are fleeing the company. Investor lawsuits, supplier lawsuits, strikes – the impact is growing. Your own distribution The network, your dealer organization, is anemic and atrophied,” Farish wrote in Tuesday’s letter, which was first reported by Bloomberg late Wednesday.
Farish, the Virginia dealer, said the dealer council has been raising concerns about the company’s operations for two years and accused Tavares of “reckless short-term decisions” that boosted profits and inflated his compensation but This resulted in a “rapid deterioration” of its brand, he wrote.
Stellantis, General Motors and Ford stocks
Stellantis said in a statement late Wednesday that it was “absolutely exceptional,” noting that sales in August were up 21% from July and that it had “an action plan in place with the dealer body.”
“At Stellantis, we do not believe that public personal attacks, such as those contained in the NDC President’s open letter against our CEO, are the most effective way to address issues,” the company said. “We have begun a path that will prove successful. path. We will continue to work with our dealers to avoid any public controversy that would delay our delivery.”
Stellantis posted record profits in 2023, but so far this year the automaker has reported a first-half net profit of 5.6 billion euros ($6.07 billion), down 48% from the same period in 2023.
Stellantis shares are down about 36% this year to about $15. The stock hit a new 52-week low of $14.76 on Thursday.
Since the merger of Fiat Chrysler and France’s PSA Group PSA in January 2021 to form the company, Tavares has been on a profit-oriented, cost-cutting mission. It is increasing profits and doubling revenue to €300 billion ($325 billion) by 2030.
Cost-saving measures include reshaping the company’s supply chain and operations, cutting jobs and cutting vehicle production at factories.
On August 7, 2024, in Romulus, Michigan, USA, United Auto Workers (UAW) President Shawn Fain made a speech in front of U.S. Vice President and Democratic presidential candidate Kamala Harris. Kamala Harris and her running mate Tim Walz address attendees at a campaign rally.
Rebecca Cook | Reuters
Several Stellantis executives told CNBC that the early layoffs were difficult but effective. Others, who spoke on condition of anonymity because of the potential impact, said their training had reached a point of excess.
UAW President Shawn Fain has also publicly criticized Tavares, including during a speech at the Democratic National Convention last month. He accused Tavares of gouging consumer prices and failing to abide by parts of the union’s labor contracts with the automakers.
The UAW, which represents about 38,000 Stellantis employees, held a rally Thursday afternoon at a union hall near Stellantis’ Warren truck assembly plant in suburban Detroit to “denounce the company’s gross mismanagement,” according to an email.
U.S. sales of Stellantis (formerly Fiat Chrysler) have declined annually since reaching a recent peak of 2.2 million units in 2018. 13% compared with the previous year.
Stellantis’ performance compared with the overall U.S. new light vehicle sales market grew 13% last year, according to federal data.
