❌

Normal view

There are new articles available, click to refresh the page.
Before yesterdayMain stream

Inside the big shake-up at Stellantis, as the embattled Jeep maker looks to boost morale and win back dealers' favor

14 December 2024 at 01:45
Auto factory workers exit a Stellantis plant in front of Ram trucks on display
Stellantis has re-hired a longtime Ram executive to oversee its truck division, a bright spot for sales as the company seeks to increase profitability.

JEFF KOWALSKY/AFP via Getty Images

  • The mood inside Stellantis has shifted dramatically after its CEO resigned on December 1.
  • Dealers and employees are encouraged by early moves made by the interim executive committee.
  • The automaker's critical relationship with US dealers is on the mend.

The mood inside Stellantis's North American division has changed dramatically since former CEO Carlos Tavares unexpectedly stepped down on December 1.

Dealers and employees of the struggling Jeep owner who spoke with Business Insider say they and many of their peers feel optimistic about how the company has handled these first two weeks.

They point to quick and sweeping changes made by Chairman John Elkann and his advisory committee, who have vowed to rebuild trust with key stakeholders.

So far, this interim executive committee has re-hired a longtime Dodge and Ram executive and reinstated a US sales chief who was shifted into a different role earlier this year, moves that disgruntled dealers immediately celebrated.

Elkann's executive committee, comprised of current and former executives, has taken over the company's leadership while searching for a new CEO, which they hope to hire in the first half of 2025.

The shift in morale happened almost overnight, sources said. Elkann delivered a rousing speech to employees at Stellantis's North American headquarters the day after Tavares stepped down, and change was swift in the days that followed.

During the employee town hall, Elkann emphatically announced the end of Tavares's "Project Darwin," a ruthless cost-cutting initiative that included several waves of buyouts and layoffs, and even, at one point, sending employees tips on how to find a new job outside the company.

Elkann instead reassured employees that Stellantis "will survive," a person who attended the meeting told BI.

Executive shuffles

Longtime Dodge and Ram executive Tim Kuniskis, who retired earlier this year, returned to the company on Monday. He is stepping back into his role as leader of the Ram brand, which builds Stellantis's highly profitable pickup trucks.

Meanwhile, a shuffle in the North American executive team saw Jeff Kommor reinstated as US sales chief, a move lauded by dealers who were frustrated to see him shifted into a commercial sales role earlier this year.

"The changes will enable us to operate in a structure that will drive the best outcomes for the region, unlock significant potential, and win in the market," a Stellantis spokesperson said in a statement. "A critical lever to accomplish that is a dedicated CEO for the Ram brand who is singularly focused on that brand."

According to people briefed on these decisions, Antonio Filosa, CEO of the Jeep brand and newly named Chief Operating Officer, was a key driver of these moves.

By the end of the second week without Tavares, Stellantis shares had risen about 12% in his absence. This is a sign that investors also feel more encouraged by leadership's new direction, including efforts to reign in oversupply and boost sales.

Dealers get back on board

Tavares lost the crucial support of Stellantis's US dealer body earlier this year, and it appears that the company is prioritizing that relationship in the early days of the post-Tavares reorganization.

Kevin Farrish, a Chrysler-Dodge-Jeep-Ram dealer in Virginia who serves as dealer body president, said the group is looking forward to working with the new "powerhouse team" Elkann's executive committee has built. He specifically mentioned Kuniskis and Kommor, as well as Filosa in his new operating officer role and Matt Thompson, who remains as senior vice president of US retail sales.

"That will truly bring us back to our former glory," Farrish told Business Insider. "We needed change, so provided the changes are correct β€” and they are thus far β€” it shows their commitment to fix things."

Read the original article on Business Insider

Stellantis' CEO is out after a tumultuous year. Here's how things got so bad at the Jeep maker.

2 December 2024 at 10:50
Stellantis CEO Carlos Tavares speaking to journalists during a joint media event by Stellantis and Leapmotor in Hangzhou, China.
Stellantis CEO Carlos Tavares resigned with immediate effect over the weekend.

AFP via Getty Images

  • Stellantis CEO Carlos Tavares's resignation comes after months of pressure.
  • The global auto giant is in turmoil amid poor financial performance in 2024.
  • Tavares leaves the company locked in legal battles with investors and union workers.

Carlos Tavares tendered his resignation from the top job at global automaker Stellantis over the weekend after a year of mounting pressure to turnaround falling sales and shrinking margins.

Dealers had accused him in September of mismanaging valuable brands that helped lead to the slowdown and a a slew of executive departures.

In October, Stellantis β€” originally formed by a 2021 mega-merger of Fiat Chrysler Automobiles and France's PSA β€” said Tavares would stay through the end of his contract in 2026. But by Sunday, things had clearly changed.

Tavares, a former protΓ©gΓ© of Nissan's notorious Carlos Ghosn, is well known in the industry for his corporate frugality. His initial cost-cutting actions helped to deliver two years of profitability. But he'll leave the company in a state of disarray, particularly in the critical North American market.

Stalling sales in North America

Stellantis's US sales through September, the most recent report, were down 17% compared to a year ago. Profit-generators Jeep and Ram posted the biggest volume losses, with Jeep ceding significant market share to competitors like Hyundai in the affordable-SUV segment.

Critics of Tavares have argued that his cost cutting actions, particularly in the Jeep brand, created a short-term illusion of success while creating a long-term problem for demand in the critical US market.

Dealers in September accused Tavares of "reckless short-term decision-making" that has had "devastating, yet entirely predictable, consequences in the US market."

Stellantis has reversed some of the more controversial decisions, like reinstating the Jeep Cherokee and Renegade for 2026, but some dealers previously told BI that the damage is already done.

Investor lawsuits and labor disputes

Tavares also leaves Stellantis in some legal disputes, including an investor lawsuit over the company's poor financial performance. Stellantis has said the lawsuit is without merit and plans to "vigorously defend itself."

The company is also locked in a bitter labor dispute with the United Auto Workers union about manufacturing commitments at an Illinois factory where Stellantis previously built the Jeep Cherokee.

The union has said it's ready to strike and has already begun initiating authorization votes at local units.

Stellantis, in return, has filed a lawsuit accusing the union of violating its contract with the strike threats, citing language that allows for changes to plans based on market conditions.

A special committee has been formed to search for a new CEO, and that process is "well underway," Stellantis said in a Sunday statement. During the search period, Stellantis Chairman CFO John Elkann will lead an interim executive committee, the company said.

Read the original article on Business Insider

❌
❌