UAW Condemns Stellantis CEO for Management Practices

The United Auto Workers (UAW) union, alongside Stellantis's dealer network, has launched a public attack on CEO Carlos Tavares, accusing him of prioritizing profit over the health of the auto manufacturer. The criticisms come amidst a backdrop of declining sales, factory production cuts, and plummeting stock prices, all of which are impacting the livelihoods of auto workers and dealers.

• The UAW and Stellantis dealers are united in their criticism of Tavares's management style, citing a series of decisions they believe are detrimental to the company's long-term success.
• The UAW, which represents roughly 38,000 Stellantis employees, is holding a rally to "condemn the gross mismanagement" at the company.

Stellantis's Sales Decline

The company's sales figures are a major point of contention. Stellantis, formerly Fiat Chrysler, has seen its U.S. sales decline every year since a peak of 2.2 million in 2018. Last year, the company sold more than 1.5 million vehicles, a drop of 1% from 2022 and a significant 13% decline compared to the previous year.

• These figures paint a stark picture of the challenges Stellantis is facing in the increasingly competitive auto industry.
• While the overall U.S. new light-duty vehicle sales market increased 13% last year, Stellantis's performance lags behind, indicating a deeper issue within the company's operations.

Tavares's Profit-Driven Strategy

Tavares has been on a mission to drive profit and cut costs since the company was formed through a merger between Fiat Chrysler and France's PSA Groupe in January 2021. This mission, known as the "Dare Forward 2030" plan, aims to increase profits and double revenue to 300 billion euros ($325 billion) by 2030.

• The cost-saving measures, which include reshaping the supply chain, reducing headcount, and cutting vehicle production, have been described by some Stellantis executives as "difficult but effective."
• However, others, speaking anonymously due to potential repercussions, have characterized the cuts as "grueling to the point of excessiveness."

Criticism from Dealers and the UAW

The dealer council, representing 2,600 U.S. dealers, has penned an open letter to Tavares, expressing their dissatisfaction with his leadership. They argue that his focus on short-term profits has come at the expense of long-term brand health, leading to a decline in Stellantis's market share, a tumbling stock price, plant closures, and rampant layoffs.

• The dealers are particularly concerned about the impact of Tavares's decisions on their businesses, as they face a diminished market for Stellantis vehicles.

Stellantis Responds to Criticism

Stellantis responded to the criticism by highlighting a 21% increase in August sales over July and an "action plan developed with the dealer body." They also expressed dissatisfaction with the public nature of the criticism, calling it "personal attacks."

• The company's statement suggests that it is willing to work with its dealers to address the concerns, but it also indicates a desire to avoid further public disputes.

The UAW's Perspective

The UAW has also publicly criticized Tavares, accusing him of price gouging consumers and failing to uphold parts of the union's labor contract. The union's stance reflects the concerns of auto workers, who are directly affected by the company's decisions on production and employment levels.

• The UAW's rally against Tavares highlights the broader impact of his management decisions on the lives of Stellantis employees.

The Future of Stellantis

The conflict between the UAW, dealers, and Stellantis's leadership highlights the challenges facing the company as it navigates a changing automotive landscape. Whether Tavares can successfully navigate these challenges and achieve his ambitious goals remains to be seen. The outcome will have significant implications for Stellantis's future and the livelihoods of its employees and dealers.

• The situation highlights the importance of balancing profit goals with the needs of stakeholders such as workers and dealers.