I was talking with a friend at Stellantis a while back, and they straight-up said they were looking forward to the next regime, whatever may come. With the surprise announcement from Stellantis that CEO Carlos Tavares is resigning, it’s time to consider what can be done to save the American brands of Chrysler, Jeep, Dodge, Eagle, and Ram. Well, maybe not Eagle.
And what of Europe? What should the rest of the brands (Fiat, Lancia, Alfa, Maserati, et cetera) do? I’ve got some thoughts about how new interim boss John Elkann can start to piece the company back together if that’s what he wants.
Why did Tavares leave? Yesterday, I didn’t have an answer, today it’s becoming a little clearer how the final moments played out in the Stellantis bunker somewhere in Amsterdam. It’ll give me a chance to review his term as CEO and make an offer to any other brand that might be interested in picking up his term.
Stellantis Should Move Its Headquarters To Detroit Or Drop North America All Together
When Fiat picked up the various Chrysler brands for a song, the newly merged Fiat Chrysler (FCA) made sure people knew and understood that it was still an American company. Reeling from two failed wars and an economy that was made out of soggy gingerbread, America in the late aughts could be a depressing place. The young company embraced the new administration’s message of hope and Detroit’s underdog spirit to create the “Imported from Detroit” campaign.
It worked. We believed Eminem when he said the vehicles would reflect American attitudes and tastes, even if the guy who ran the company was suddenly a chainsmoking, sweater-wearing Italian. In fact, then-CEO Sergio Marchionne was a constant fixture in North America who was largely liked and accepted by American journalists, execs, and employees.
Carlos Tavares never found that acceptance. A successful CEO in Europe, Tavares stayed mostly European. As head of Opel and Peugeot, Tavares was seen as a smart guy who saw the coming changes to the global car market and began to make the hard decisions necessary to keep those brands afloat long enough to eventually merge with FCA to create Stellantis.
In fairness to Tavares, this was Marchionne’s dream as well. Fiat always wanted to be a bigger global player, and Tavares realized Marchonne’s vision. Unfortunately, Tavares was never equipped to make the deal work. In his selection of managers, his reduction of engineering/product development in Michigan, and his constant bickering with suppliers/workers/governments, Tavares understood the potential of a combined global automaker but never quite understood what to do with it.
In the interim, market share in North America has taken a nosedive, and with it the profits needed to sustain the failing European operation (Stellantis lost a third of its share in Europe since Tavares took over, and Fiat is down by half to just 1.8% of Europe’s total market). Earlier this year I wrote that I didn’t think Stellantis, though coming off a profitable year, would be able to stick the landing. It clearly didn’t.
What can be done? I think Stellantis has two choices:
- Become a more American company
- Spin off the American brands
America needs a fourth major automaker, and Jeep is one of the strongest brands in the world, other than maybe Tesla or Ferrari. IF Stellantis wants to keep the American arm it needs to invest in making good products with American engineers, marketers, and designers. Tavares arrogantly assumed he could outsource much of the work to Europe, Brazil, and India.
In the impending Trump era, it’s clear that there’s going to be an industrial policy here that favors American production. Honestly, even if Harris had been elected, I think this was going to be the case. Rather than fight it, Stellantis needs to embrace it with vehicles and concepts that make the various brands fit within an American portfolio and not a ‘House of Brands’ that also includes Alfa, Fiat, and Maserati.
In fact, Fiat, Alfa, and Maserati have to leave North America. It was a fun experiment and it didn’t work. Oh well.
Dodge needs new products, badly, and it needs them to cover the entry-level of the market that the Korean and Japanese automakers are dominating. Ram needs to become a part of Dodge. While the Wagoneer and Wagoneer S can stay, Jeep needs to offer a fuller and better (newer!) range of crossovers on the lower/middle end of the market. Chrysler needs some flagships and, in fact, Chrysler should have been the EV brand all along while Pacifica should become the Dodge Grand Caravan again. That’s three brands, all distinct, that make sense. Make Ralph Gilles CEO. Easy. Done.
If Stellantis can’t do that, it should just let the American brands become a new company as it did with Ferrari. It worked out for Ferrari and it can work out for the newly re-minted Chrysler Corporation (with Ralph Gilles as CEO, just saying). It’s probably a bad time to become a public company, so I’m not sure how that’ll work, but perhaps there’s enough private capital out there to try.
What About The Rest Of The Brand?
John Elkann, pictured above with his brother Lapo and his sister Ginvera, is the Chair of Stellantis, CEO of Ferrari/Stellantis shareholder Exor. He’s also the grandson of famous Italian industrialist Gianni Agnelli and has long operated as the family leader following the death of his uncle.
He’s going to be running the company in the interim, and he’s going to have to help pick a leader with a vision for Stellantis. I’ve explained what I, a humble blogger, think needs to be done in North America. What about Europe?
Sell Peugeot and Citroën to Renault. Just get rid of it. It’ll make everyone happier and Renault has a hot hand right now. Sell Maserati to a Chinese automaker. Keep Alfa Romeo and let it be a sister brand to Ferrari so Ferrari dealers can get a car to its clients while its clients wait two years for a Ferrari. Fiat can be an Italian brand again, and one with eyes on cheaper cars in Europe and South America. OR, just sell that as well.
Honestly, the car business is an old business and you’ve already got Ferrari. What do you even want Fiat for? Let that be someone else’s problem.
Carlos Tavares Took The Money And Ran Away
Friends, readers, CJDR dealers, lend me your ears. I come to bury Stellantis CEO Carlos Tavares, not praise him. The capital expenditures men do live after them; the higher margin quarters often interred with their bones. So let it be with Carlos.
Tavares, not pictured above, is an interesting character. His reputation coming into the Stellantis deal was stellar. As longtime auto exec Dr. Andy Palmer put it, “Carlos is perhaps the most professional car guy I’ve worked with. He’s created some of the most iconic cars, including the Renault Megane series. That Stellantis exists at all is all down to Carlos.” He also added that Carlos is also a “bloody good driver.”
Other than Elon Musk, Carlos Tavares is probably the highest-paid automotive CEO in the world, having made about $40 million in 2023. He did it by driving margins up on cars in America by squeezing out the same old products at a much higher price to consumers who didn’t have much of a choice. It worked until it didn’t and, unlike his former boss Carlos Ghosn, it seems like Tavares is going to get out with the money. His reputation? That’s another story and seems related to why Tavares left.
Here’s what Reuters is reporting, though I haven’t heard the Tavares side of it yet:
A source familiar with the matter told Reuters that tensions grew after the board felt Tavares was moving too quickly and focusing on near-term solutions to save his reputation, not working in the best interests of the company.
The sudden announcement on Sunday indicated that the fissures between the board and Tavares had to be severe, given that the parties decided it was better to operate with no CEO on a short-term basis, Bernstein analysts said.
Yikes. Once the company announced it wasn’t going to pick up the Tavares contract it didn’t really make sense to keep him on as his motivations would be either to make as much money as possible or, as indicated above, try to make himself look better.
Here’s the kicker on that article, by the way:
“Tavares is leaving behind a mess of painful layoffs and overpriced vehicles sitting on dealership lots,” UAW President Shawn Fain said in a statement.
Double yikes.
Someone, Please Hire Carlos Tavares
I’ve been doing this bit with Carlos Tavares, pictured above, since at least February. The basic premise of the joke is that the actor Jon Lovitz tends to play characters who are always willing to say or do anything to get an advantage over other people.
I truly enjoy this bit and would like to see it continue. I also think Tavares blundered this, but he does have a great history and loves old cars.
So here’s my deal: If you’re a struggling automaker, an upstart firm, or any other carmaker in need of a CEO, please hire Carlos. If only to keep this joke going I will write more about KTM or Polestar or whatever way more than I would if you hired some normal MBA exec person.
What I’m Listening To While Writing TMD
With a shoutout to SWG, here’s a little Paul Simon from the excellent “Graceland” doing “Diamonds on the Soles of her Shoes.”
The Big Question
Do you also agree that Ralph Gilles should take over Stellantis? If not Ralph, then who would you pick?
Paul Simon scares me. Love his music, but I always feel like there’s something dark in his soul. Like he’s capable of murder or something. I can’t quite put my finger on it and am probably wrong, but it’s always been there for me. It’s strange (like myself).
I get the same vibes from him. There’s definitely something there but he’s more likely to inflict something on himself than on others, tragic as that is.
Well he is 83, so he has managed to tame the demon I guess.
Edie Brickell seems into it.
Getting Mike Manley back from AutoNation to run Stellantis would be huge IMO.
I can’t speak for their Non-US operations but I agree with both of your ideas for the US market, Matt.
I just dont see me ever buying a Stealantis product. I like the Viper and the MC20.. but outside of those objects which I dont have money for… there is nothing they offer that is better than the competition or certainly not for a similar price.
My point here is management aside, until they have a product that I like, and auto journalists and people I respect sign off on said product, I simply wouldnt even look at one.
I would like to see Elon Hire him to run Tesla while Elon plays VP.
I can only comment on Stellantis in the US market because, aside from what I read here, I know next to nothing about how they’re doing in Europe. I respect Matt’s proposals but suspect they may not go over so well there. I’d like to hear more from the European perspective on what could be done in that regard. I’ve noticed a tendency for Americans to disregard the European brands and vice versa.
In the US I’d say CDJR’s best option is to downsize if they are unable to adequately rebadge some of their European platforms (it’s no secret the Tonale/Hornet could have been handled much better). Historically, Chrysler has always been the sick man of the Big Three trying to play with the high rollers on a low-stakes budget. They’ve come out with some fantastic products over the decades – but often only by the skin of their teeth.
Without volume, they cannot compete as a Big Three automaker. That is not necessarily a bad thing. Chasing that dream is what killed Studebaker and AMC, and foreign makes weren’t even as big then as they are now.
There is plenty of room for smaller automakers nowadays and CDJR would be better off on a level closer to Mazda or Subaru. But then again, even those two are partnered with Toyota.
Looks like it’s time to reanimate Lee Iacocca.
I’ve said this before, fold Ram into Dodge to form the brotastic/performance combo brand, Jeep for SUVs that trade on the outdoorsy/off-road image, and Chrysler to be the mainstream brand that fills in all the basic boring crap. Offer a long-ass warranty on everything to bring back a level of trust. If they can get things back on track, then focus on bringing another Stellantis brand for a crack at the luxury market. But for now, none of these brands have the reputation or cache to sell expensive vehicles, unless there’s a certain level of capability present.
I mean Ram was always Dodge to most of us. I think the separation was just in case they needed to sell Jeep and Ram separately since they were making most of the profits at the time.
the Cold Turkey drop of the drivetrains that were surprisingly to some gaining Ram a better than average quality rating were suddenly removed and the replacements have not proven themselves and for whatever reasons are not readily available while they try to clear out old inventory.
The transitions and MY gaps are as much as anything the reason for the perceived failures of Stellantis.
Ralph Gilles is definitely the man for the job, but boy that is a job I do not envy!
I think it depends on the guard rails you are forced to live with.
Like it is probably time to stop pretending the Italian brands will catch on in the US.
Fiat, Maserati, Alfa Romeo barely move the needle on anything. Yeah enthusiasts love the idea of the Guilia Quadrifoglio. The MC20 is cool. Problem is no one is buying Stelvios and Levantes instead of a X5 or GL450. Most of the product is ancient and expensive (seems to be a trend across Stellantis).
I suspect Stellantis, with its Italian overlord, will not like the plan to axe Italian brands from the US market. Or at least focus on making one of them competitive.
I have owned 5 jeeps and 2 Chrysler minivans. My current Wrangler I bought new 12 years ago and my Pacifica 5 years ago also new. I earn so much more than I did 12 years ago and yet could not afford a new wrangler. They have gotten too expensive.
the two essential ingredients i believe are necessary for this corporate recovery are:
1- strategy for corporate governance, specifically which operations are brand-specific and which can be centralized for “synergy” (i.e. lots of layoffs). logistics, supply chain management, HR, finance, etc can all be centralized – and if not, then a transparent reason to keep it balkanized, e.g. ‘we intend to keep lancia as an independent, self contained business unit cuz we’re planning to spin it off next year and can eat the inefficiency cost-charge in the interim”.
Also, are there brands that won’t survive a lifeboat drill?? start planning for them to “move to the farm”.
how will dealerships look as a business model in a decade? start getting ready.
2- product planning.
needs to rationalize distribution of finite capital investments.
there has to be an overall strategy and vision – be it product-platforms or something else.
it could be centralized or each brand left alone to develop a product roadmap and petition for funding. i prefer the latter, to preserve market knowledge. corporate could either vet each brand’s wish list (with ROI commitments with executive careers held accountable) or coordinate the roadmaps between plans (” no, we can’t fund 3 high-end EV SUVs for 3 brands all chasing the same market, we choose XX not yours. re-draft your brand’s roadmap without that niche”).
Yes, hire Carlos Tavares so you get extra coverage from the Autopian! There are dozens of us reading it!
Not just dozens, but baker’s dozens!
Matt, you are quite an interesting person. Jon Lovitz, William Shakespeare, and Paul Simon – all in one piece – is quite the trifecta.
PS, Renault will never touch Peugeot or Citroën. Far too much cultural baggage for that to ever fly.
I have always thought the same thing. If there is one thing Europeans have perfected, it’s pride. There is no way that the French are will to share their pride amongst all three native brands.
those ‘three brands” have been two companies since forever (Renault/Alpine & PSA)
Les Echos, the financial paper in France said he made four big mistakes:
1: Linked to America, stopped reading the numbers on un-sold Jeeps which built up from end of 2023. Then when told he had a problem, refused to lower price and margins, and so lost out to Ford and GM…
2: Pushed cost cutting so far the whole group was weakened (I know my Citroën garage has been grumbling about phones not being answered and when they are know nothings on the other end all year.)
3 Started sacking managers when they bought him news he did not want to hear. Result — they stopped bringing him news, especially bad news.
4 Spent an absolute fortune in China with zero result.
Personal level, only time I saw him in action at a press conference/ results conference, he came across as a nasty, arrogant little shit…
They have spent the past 20 or so years going European (with great success). I think they should spend the next 20 or so years going Japanese. How could that possibly go wrong??
I think the American part of this brand should just be Chrysler minivans ram trucks and Jeep wranglers. Ditch everything else.
I disagree with Jeep needing more crossovers at the lower and mid range. The problem is this why make a half assed version of a Honda or Toyota crossover that’s not as quality and more expensive when people will just go by the Honda or Toyota crossover Jeep needs to play into Jeep maybe have some more range but more off-road focused or more unique not just more boring bland crossovers that customers just shop a Japanese or Korean car company for
If given the resources to really modify their platforms, Jeep crossovers could be really unique products. Like a bronco sport/Maverick that does actually off road well without overheating the viscous coupling.
The 4×4 system used in the front drive “trailhawk” trims that has a legit locking rear diff is a great example
For example they could separate the platforms a la how a Macan simultaneously is and is not a gussied up Q5. It is a unique (and vastly better) product based on the same platform.
Therefore Dodge can sell the entry level, street bound version promoting performance and “loud” looks of a given crossover and Jeep would sell the somewhat upmarket off-roady version with a unique drivetrain.
I can’t tell the Jeeplets apart.
Agree. They kill off the one intriguing design and, for a time at least, had three different sizes of basically the same thing. From behind, it’s hard to distinguish a Compass from a Cherokee.
They make the Grand Cherokee, Wrangler, Wrangler truck, and the Wagoneers. I know there are more, but couldn’t tell you what they are.
As a Note, I think Ralph should take over and run it for a while. Ralph can’t do worse than Carlos and would be more than willing to work for 1/2 or even 1/4 of the amount of money that Carlos made.
I just have questions about the spelling of Ralph’s last name. Not enough Ys in it. Just saying.
Double down. Merge with Nissan for two more brands!
Dominate the sub-prime market like no one has ever seen!
Only if they slap the eagle name on everything Nissan.
The Eagle Crosscabriolet
You only get one shot, do not miss your chance to-
Well. You only *got* one shot.
Somehow I feel like “Crazy Love Vol. II” from the same album would have worked better as a complement to Stellantis finally getting rid of Carlos Tavares (pictured above). Carlos, we don’t want no part of your crazy love.
Wow! When Stellantis gobbled up Chrysler et al several years ago, I wrote in the comments here (or maybe the old site) that it would sell all the Jeeps/Rams/Chargers until it couldn’t. I was kidding on the level because I figured that guys who run auto companies (not girls, because Mary B seems to be better at it) ought to have a more nuanced approach to business planning.
Doggone if I wasn’t wrong and right!
And now Matt Hardigree writes:
“He (Tavares) did it by…by squeezing out the same old products at a much higher price to consumers who didn’t have much of a choice. It worked until it didn’t.”
Shrewd planning.
I think what we’ve seen is that America desperately needs a third (or, better yet, third and fourth) viable political party; not a fourth domestic automaker.
Toyota, Honda, and to a much lesser extent, Tesla have done a fine job of investing, building, and designing in-and-for their local markets. They feel genuinely more domestic than ‘Chrysler’ has since the Dieter Zetsche days.
I think there are a lot of similarities between Jochen Zeitz of Harley Davidson and Carlos Tavares. That being said don’t hire Jochen, he is failing at keeping that company relevant. If you are in charge of an American Brand you need to understand Americans. That is Carlos’ downfall and Jochnen’s.
Carlo’s understood what Americans wanted. He just didn’t know what Americans wanted next.
Obviously someone hasn’t worked in corporate America to know the real solution.
Fire the janitors.
If that doesn’t work, fire everyone in HR, so the complaints and suggestions of the pee-ons and fartcatchers never float up to the corporate board and waste valuable time that could be spent shopping for new yachts.
PS, I do know how to spell peon, but my spelling is more accurate to their mentality.
I really do think Stellantis needs to restructure, either as a dual listed company (two legally separate entities with identical boards, shareholders, and executive teams managed as if one business), or convert to a keiretsu-like arrangement where they become totally independent from each other, but remain allied and cooperate in mutually beneficial areas, cemented through overlapping shareholdings in each other. Spin off Stellantis North America to Stellantis shareholders and let it go its own way. Marchionne came close to doing that at one point, but more as a threat if Chrysler Group labor unions didn’t cooperate with his proposals
You’re helping me with where I’ve been going, as I’ve been pondering the similarities to ’00s Ford and Jacques Nassar’s PAG. Ford was smart to simply dump all of that and focus on the stuff with its actual name on it, but that seems a stretch here…