Should Ram, Jeep, Alfa Romeo, Or Chrysler Die? The Next Stellantis CEO Will Have To Decide

This I took Latin in high school, with the idea that it would help set me up to learn any language. That’s not how it happened, as any of my college Italian professors can attest. Maybe the most important thing I learned was that Joaquin Phoenix made the wrong gesture to spare Russell Crowe’s life in the movie Gladiator, which came out while I was in highh school.

A thumbs-up, back in Roman days, indicated you wanted a gladiator killed, whereas a thumbs-down meant “put your sword in the ground.” The actor and director made the right choice, because it would be hilarious if Phoenix gave a goofy thumbs-up at that moment. It just wouldn’t work.

You know what also doesn’t work? All 14 Stellantis brands existing at once. It’s enough slices! The Chairman of Stellantis is out looking for a new CEO to replace The Morning Dump’s favorite Carlos Tavares, and the big question is: What to do with all these brands?

Tavares called this a “Darwinian period” in the automotive industry, and one way automakers survive is through cooperation. GM and Honda, for instance, teamed up on hydrogen fuel cells. No more! Honda is not planning to work with GM on this technology anymore. One place where GM and Honda teamed up is with the Prologue, which continues to be a great seller in the EV space.

Germany had an election and the big issue was the economy. Will a “Kenya coalition” help save Volkswagen?

It’s Not Clear Stellantis Saves Much By Absorbing Chrysler And Ram, So Europe Is Probably The Target

Was I attempting to be provocative when I wrote “Jeep” in the headline? Yeah, of course. If a CEO candidate goes to Stellantis Chairman John Elkann and says “My first order of business is to absorb Jeep into Citroën” that candidate is going to be defenestrated from the conference room without delay.

Jeep is the one brand out of all Stellantis brands that has a strong identity, the ability to charge high-ish prices for vehicles, and can keep the company solvent. Ram, too, is one of those brands, though there’s some logic to absorbing Ram back into Dodge.

I mention this because that’s the big question Elkann has for the next CEO, according to this report from Reuters:

A source familiar with Elkann’s thinking told Reuters that the topic was a priority, and that any applicant for chief executive without an idea about the brands “is not the right candidate.”

Of course not! Could you imagine showing up and getting the question and being like “Uhhhh… we should cut Simca.” Stellantis only has these brands because it’s the awkward tie-up of PSA (which was the awkward tie-up of Peugeot and Citroën/DS) and FCA (which was the awkward tie-up of Fiat’s too many brands and Chrysler’s too many brands). Oh, and Opel. I keep forgetting Opel. Am I sad that Oldsmobile and Mercury are gone? Of course. Are Ford and GM worse off because those brands are gone? Probably not.

Hard decisions will have to be made and it’s unlikely that most of those decisions will be at the expense of American brands. Why? As explained in the piece:

Jeep accounted for at least 15 percent of Stellantis’ global sales in 2024, according to Reuters calculations, and Chrysler and Dodge around 3 percent each.

“If I were to have a magic wand … I would probably say Jeep should absorb Chrysler and Ram should absorb Dodge,” said Erin Keating of research firm Cox Automotive.

“But you are not saving a ton of money,” she added, as the four “each have their own brand equity,” complement each other in terms of range and share the same dealers.

What do you really save by Jeep absorbing Chrysler? Not much, although a Jeep-branded minivan? That’s actually a great idea. I’d never once had the thought. I’ve always assumed Dodge would just absorb Chrysler and we’d get a “Caravan” back but, yeah, now that you mention it a Jeep minivan makes sense in the way that “Me espresso” makes sense. Syntaxtually it’s a mess. Emotionally it’s a winner.

If anything gets cut it’s European brands. Lancia makes one car. Citroën has a broader lineup, but why does Stellantis need an Opel, Citroen, DS, and Peugeot version of the same car? The answer is that they do not.

Renault is in the same market and is much more successful, partially because it has fewer than half the brands. We’ve done this exercise before, of course, and I still think Lancia and DS are the first to go. Sell Maserati. Alfa gets one high-end, Ferrari-derived sports car.

That’s it.

GM And Honda No Longer Co-Developing Hydrogen Fuel Cells

I will once again go on record saying that I do not understand hydrogen as a power source for passenger vehicles. It doesn’t work. Charging times for EVs will come down way faster than new hydrogen filling stations will go up. Maybe for heavy trucks, it’s a solution. Maybe.

Honda and GM are both car companies that harbor the illusion that people want to buy hydrogen-powered cars, though they were at least smart enough to divide the expense by working together. The new Honda CR-V e:FCEV, for instance, has a jointly developed system.

That is not going to be true for the next generation car, if there is such a thing, according to Automotive News:

Honda Motor Co. is ditching longtime partner General Motors to go solo in developing and manufacturing its own next-generation hydrogen fuel cell system, the latest sign of unwinding ties between the Japanese and American carmakers amid shifting auto alliances.

Honda announced its upcoming fuel cell system Feb. 19 at the International Hydrogen & Fuel Cell Expo in Tokyo. The setup achieves double the durability and triple the volumetric power density at half the cost of the current system developed with GM and produced in the U.S.

Honda said the greater power density, a measure of the amount of energy churned out per unit volume, allows the system to be more compact so it can fit flexibly into different layouts.

Honda, for its part, is attempting to work more with Nissan while GM is collaborating more with Hyundai.

The ID.4 Is Back In The Mix

There are some people who, now, would never buy a Tesla because of the association with Elon Musk. I tend to think many people don’t care or, at least, would be persuaded by a lower price to buy one.

My guess is that if sales look really low at Tesla this quarter, we’ll see Musk offer a truly phenomenal low price on a “cheap Tesla” that’ll get a trillion pre-orders. In the interim, perhaps the best measure of the growing competitiveness of non-Tesla automakers is the resurrection of the VW ID.4 and the continuing success of the Honda Prologue.

Based on registration data, EV sales were up almost 30% year-over-year in January as people worked quickly to take advantage of the IRA tax credit while it was still in effect, according to Cox Automotive:

January marked the tenth consecutive month with over 100,000 units sold. Following a record month in December, when U.S. EV sales reached the highest level ever, a month-over-month sales decline was expected. The top five selling models, ranked by sales volume, were the Tesla Model Y, Model 3, Volkswagen ID.4, Tesla Cybertruck, and Honda Prologue, together making up 54% of total EV sales for the month. Volkswagen ID.4 had a comeback month, with sales up 653% to reach 4,979 units.

I see the success of the Honda Prologue as stemming, in large part, from the halo that the brand gives any car. The fact that people keep leasing Prologues in spite of mediocre reviews seems to support this point.

Volkswagen doesn’t have that halo. So why is the Volkswagen selling better? Some of this is pent-up demand, likely, as the ID.4 was stop-saled due to a door handle issue. Some of it, of course, is cheap leases. There’s a price low enough that people will choose an ID.4 over an, arguably, better Mach-E or Ioniq 5. Is there some other “anyone but Musk” energy here? I don’t know.

Germany To Form A New Government

This weekend we got a new election in Germany, which is a big deal for automakers in that country as they’ve been on the struggle bus lately. As usual in a country with proportional representation, there’s no single winner. The Conservative CDU/CSU party won about 28.% of the seats. The right-wing AfD party got above 20% for the first time ever, though basically every other party agreed to keep them out of government and build a coalition without them.

What’s likely to be formed is a coalition government made up of the CDU/CSU (whose color is black), the center-right SPD (whose color is red), and the Greens, which came in 4th at 11.7%. This is the “Kenya Coalition” because the combined colors make a Kenyan flag. This replaces the stoplight coalition that included the FDP (yellow), which didn’t even make 5% and thus gets zero seats.

I’ve talked before about European competitiveness and the biggest issue, as I see it, is the lack of investment. Germany has a big issue with making investments and I’m not sure any one party did well enough to fix this issue. As Deutsche Welle notes:

The rise of Germany’s extremist fringes further complicates reform of a key element of German politics: the so-called debt brake which limits fresh borrowing to just 0.35% of GDP annually. It was enshrined in the constitution to keep German debt low, but is said to have hindered urgently needed public investments.

IW’s Bergmann also said that it’s particularly problematic as mainstream parties no longer hold the two-thirds majority in the new parliament needed to amend the constitution to reform the debt brake or pass special funds.

In addition, the massive gains of the AfD, which has doubled its result compared with the 2021 election, is worrying business leaders as they fear negative consequences when recruiting urgently needed foreign workers.

Good luck with all that.

What I’m Listening To While Writing TMD

There’s a whole album from the band Seatbelts that’s basically the music from the spectacular anime show Cowboy Bebop. I am not, naturally, an anime person. I just never got into it. This show rules, though, and the songs, composed by Yoko Kanno, are worthy to listen to on their own. Start with “Tank” and don’t look back. Does this count as defiant jazz? Maybe.

The Big Question

You’re interviewing for the Stellantis CEO job and you have to cut three Stellantis brands immediately. What do you pick and why? Bonus, describe a Jeep Minivan.

Photo credit: Gladiator/Stellantis