Stellantis’ U.S. dealer network is none too pleased with the manufacturer and looks to be blaming CEO Carlos Tavares. The National Dealer Council has sent an open letter to the executive and it doesn’t pull any punches. It blames his decisions for the swift decline of numerous brands taken over when PSA Group purchased Fiat Chrysler Automobiles in 2021.
The letter calls the present situation disastrous and faults Tavares’ for “reckless short-term decision-making.” Dealers want more investments to go toward clearing out older inventories and developing new models that would help boost sales. They’re concerned that Jeep, Dodge, Ram, and Chrysler are all losing market share — making it seem like Stellantis doesn’t care about the American brands.
Demands were made that Stellantis begin building vehicles “Americans want to buy and can afford” and to focus on ramping up production.
There were also some pretty bold claims made about how high-ranking executives are taking in record-breaking payments while the average worker languishes and risks being laid off. The main data point used was Tavares pay package of $39.5 million last year, which was up 56 percent from 2022.
Stellantis responded on September 11th, effectively calling the letter a personal attack against the CEO. It likewise asserted that its preexisting plan will be successful and that it will continue to “work with our dealers to avoid any public disputes that will delay our ability to deliver results.”
From Stellantis:
We take absolute exception to the letter sent by the president of the Stellantis National Dealer Council (NDC), Kevin Farrish. Last month, we introduced an action plan developed with the dealer body that has already shown results. August sales were up 21 [percent] over July, market share was up 0.7 points, and dealer inventory was reduced for two consecutive months by 42,000 units or approximately 10 [percent] in total.
This is the result of working together with our dealer network and we want to thank them for their constant support and engagement. We meet and talk monthly, have weekly calls and personal conversations at the highest level. This is where such dialogue should take place.
Our guess is that the National Dealer Council felt it wasn’t making much headway working with the business internally and decided it might be able to make headway by publicly embarrassing Tavares. The automaker did announce a $406 million investment in Michigan (the state where it has seen a large number of layoffs recently) on the same day as its rebuttal to the NDC. However, that may have been something it was already working on before the dealer letter went out.
The investment likewise isn’t something that caters to dealer desires perfectly. Most of the money looks to be going toward retooling of the Sterling Heights Assembly Plant to build all-electric pickup trucks and the Warren Truck Assembly Plant which is going to build the electrified version of the Jeep Wagoneer (pictured above). The rest looks to be going to the Dundee Engine Plant for a mix of upgrades that would cater to both gasoline and electric powertrains.
However, we don’t need to tell you that all-electric trucks could be selling better right now. Estimates have EV trucks (which includes all-electric SUVs) saw around 60,000 U.S. deliveries through the first half of 2024. Americans already seem to be losing their appetite for six-figure gasoline or diesel pickups, with their EV equivalents being even less popular.
Ram has been averaging around 10,000 fewer monthly sales in 2024 against 2023 volumes.
While your author is in agreement that the PSA buyout hasn’t been terribly kind to the Chrysler legacy brands, it always seemed like Stellantis was going to try and liquidate them. Unlike the Italians and Germans, the French don’t appear to have as solid of a handle on American tastes. There likewise hasn’t been much reverence given to models or powertrains that have historically been big winners for the brands. Although that trend is hardly limited to any single automotive marquee.
To be fair, Stellantis’ valuation seesawed upward between July of 2021 and March of 2024. But it has been trending downwards ever since. Dealers certainly aren’t pleased with that and made note of the company’s financial results through the first half of the 2024. However, their biggest gripes revolve around factory layoffs and reducing inventories. The real concern is that Stellantis will be spinning down brands like Chrysler and Dodge — leaving dealers with nothing to sell.
Some of this was already happening with FCA, who arguably could have made larger investments into those brands. But Stellantis made it clear on day one that U.S. nameplates would receive a grace period in which to prove themselves to the new leadership. Stellantis also seems totally married to the concept of electrifying everything, even though there’s not a lot of evidence that average Americans want to buy EVs in large quantities right now. But we've posted articles in the past stating that industry leadership likes the idea of EVs because they allow automakers to pursue the cell-phone business model and require fewer employees on assembly lines. Many automakers don't want to be automakers anymore, they want to be tech companies.
[Images: Stellantis]
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