Stellantis CEO Faces Criticism from Dealers and UAW

Stellantis, a multinational automotive company, has been facing a wave of criticism from both its U.S. dealer network and the United Auto Workers (UAW) union.

The criticism is directed at Stellantis CEO Carlos Tavares, who is being accused of prioritizing short-term profits over the long-term health of the company.

Dealers Accuse Tavares of Prioritizing Profits over Sales

Stellantis' U.S. dealer council, which represents 2,600 dealers, has sent an open letter to Tavares expressing their concerns.

• They claim that Tavares' focus on profits has led to a decline in sales, market share, and the reputation of Stellantis' brands, including Chrysler, Dodge, Jeep, and Ram.
• They also point to the company's declining stock price, factory closures, layoffs, and a growing number of lawsuits as evidence of Tavares' mismanagement.

UAW Criticizes Tavares for Labor Contract Violations and Price Gouging

The UAW, which represents approximately 38,000 Stellantis employees, has also joined in the criticism of Tavares.

• UAW President Shawn Fain has accused Tavares of failing to uphold parts of the union's labor contract with the company.
• Fain has also criticized Tavares for price gouging consumers.

Stellantis Responds to Criticism

Stellantis has denied the claims made by the dealers and the UAW.

• The company points to a recent increase in August sales and an "action plan developed with the dealer body."
• Stellantis insists that it is committed to working with its dealers and avoiding any public disputes that could hinder its ability to deliver results.

Stellantis' Financial Performance

Despite recording a record profit in 2023, Stellantis' net profit in the first half of 2024 was down 48% compared to the same period in 2023.

• The company's stock price has also been declining, hitting a new 52-week low in September 2024.
• These financial results have contributed to the growing concerns about Tavares' leadership.

Tavares' Cost-Cutting Measures

Tavares has implemented a number of cost-cutting measures since Stellantis was formed through a merger between Fiat Chrysler and PSA Groupe in 2021.

• These measures have included reshaping the company's supply chain and operations, reducing headcount, and cutting vehicle production at plants.
• While some executives have praised these measures as effective, others have described them as excessive and grueling.

Stellantis' Future is Uncertain

The criticism of Tavares, the declining sales, and the company's financial performance have raised questions about Stellantis' future.

• The company's ability to compete with other automakers, such as General Motors and Ford, is at stake.
• Tavares will need to address the concerns of the dealers, the UAW, and investors to restore confidence in the company.