I don’t have a good answer for what global automaker Stellantis should be doing to get itself out of a ‘disaster’ of its own making. It’s hard. I do have some questions about the current strategy and I’m not alone. The automaker seems to be under the belief that it can cut inventory, cut costs, and get through its issues as if a lot of small changes can add up to a big fix. I am doubtful.
Perhaps the company’s lawyers can sue their way out of this crisis. That is what’s happening now with Stellantis attempting to stop the UAW from striking over the company’s vague plans. It could be worse for Stellantis. What does worse look like? Whatever’s happening at Fisker right now.
And, finally, I will wrap up today’s Morning Dump with a little update on the movement of lithium prices.
Stellantis CEO: It’s Just A ‘Small Operational Error’
My favorite quote from Stellantis CEO Carlos Tavares (pictured above, far left) is his assertion that what’s going on at automaker Stellantis is just a ‘small operational error.’ I can’t be sure, because I wasn’t there, but I’m guessing he added “Yeah… that’s the ticket” to the end of the quote.
I’m not even sure where to start with Stellantis. If you’ve been reading The Morning Dump for a while, you’re aware that the company’s sales suck right now, its products are largely meh, and it seems to be in a fight with everyone all the time. Things are going so poorly that it sounds like the company is already looking for a new CEO when Tavares sees his contract run out, and there are rumors that the French government might push the company together with rival Renault.
It’s not good. The most pressing issue is that Stellantis dealers are, depending on the brand, either stuck with a ton of inventory of vehicles (Ram/Jeep/Dodge/Chrysler) or starved of new products (Alfa/Fiat). Here’s a chart that shows how the year is going, via Cox Automotive:
Toyota had a bad Q3 due to some recall issues but otherwise is seeing market share growth this year. Who isn’t? Tesla is down, for… reasons, and so is BMW. The big outlier? Stellantis is losing sales and losing a lot of market share. The obvious short-term solution is incentive spending, and there has been some incentive spending, but it hasn’t been a full-on blitz or strategic or large enough according to a dealer who spoke anonymously with Automotive News:
If rivals raise incentives “and we leave ours ostensibly the same for Q4 that we just ended the month with, is it going to be enough to carry the day?” said a dealer who asked not to be identified, per Automotive News.
Another issue is that older 2024 models, in this dealer’s view, were too expensive and need higher incentives than 2025 offerings that in some cases have lower prices when discounts are factored in.
“That’s the part that they’re not getting their head around,” the retailer said. “They’re trying to micromanage their way and hold as much profit, but we need to blow out the inventory so that the dealers will start ordering again and help them bring in money because that’s good for all of us.”
Stellantis: Let’s Just Sue The Union!
The UAW has told its members to be ready to strike Stellantis over the company’s possibly changing commitments to production in North America, which is a concession the union won in its big strike last year.
What’s Stellantis doing? Suing the UAW:
Stellantis filed the lawsuit Thursday evening in the U.S. District Court, Central District of California. It alleges the UAW is acting in “bad faith by going on a publicity campaign, filing sham grievances” and ignoring the contractual language that gives the automaker leniency in its future production decisions and “now calling a vote to authorize a strike based on these bad faith grievances.”
I have no idea whether or not the clause, called Letter 311, can be used this way, but I’m guessing we’re going to find out if it’s the UAW or Stellantis going down … down.
Fisker’s Bankruptcy Plan Might Be Interrupted By The SEC
It’s been a bad week/month/year for Fisker, and the company’s plans to file for bankruptcy have been interrupted by an SEC investigation according to TechCrunch:
The company recently reached a settlement plan with its creditors on how that liquidation will go, but the SEC on Friday filed an objection to the plan. The commission said it’s concerned there is insufficient language protecting its ability to pursue the company or other parties in its investigation. The SEC also objected to the settlement because it makes no mention of how, or even if, Fisker plans to preserve its corporate records.
“The Commission has outstanding investigative subpoenas and may have the need to request or subpoena additional documents in the future relating to its ongoing investigation,” the SEC wrote in the filing. The SEC also said it has asked Fisker where its corporate records will be maintained after a settlement plan is enacted but “has not received any response.”
That’s not great.
Rio Tinto Tries To Buy Lithium Producer Before Prices Go Up
I love this chart of spot lithium prices from Trading Economics because it does a decent job of mimicking the hype cycle for electric vehicles so well. The price of lithium carbonate has plummeted from the highs of the pandemic, due in part both to increased supply and stabilized demand expectations.
That hasn’t stopped major mining firm Rio Tinto from trying to get in on lithium.
Reuters exclusively reported on Friday that the companies had been holding talks, and Arcadium could be valued at $4 billion to $6 billion or higher.
The approach was confirmed by both parties on Monday in separate statements that did not offer financial. It follows a sharp slump in lithium prices and months of speculation over a potential deal.
“The approach is non-binding and there is no certainty that any transaction will be agreed to or will proceed,” Rio said in its statement. Both companies said they would not comment further.
For a while I owned Rio Tinto stock and I had to go back and check. It doesn’t look like I do, which makes reporting on this easier, though it’s a bummer because the stock is doing quite well now.
What I’m Listening To While Writing TMD
I’m not a huge Arctic Monkeys fan. I like them but I don’t seek them out. The weird, Siverlake-on-the-moon concept album “Tranquility Base Hotel And Casino” is the exception. This is my jam.
The Big Question
Who do you think is more likely to turn it around next year? Fisker or Stellantis?
The Old Man, being a ride-or-die Mopar guy, was one of the few who just snagged a “deal” from a local Stellantis dealer he’s basically on a first name basis with. He was super pumped about it, while I’m thinking it really just painted a picture of desperation.
To start, the transmission basically went out on his low-mile 2020 Dodge Journey. The dealer he bought it from suggested bringing it in and they’d try to see if they could get it fixed under warranty. He did. Went back a week later to check on it and “Surprise!”, it hadn’t even made it too the lift yet as the other vehicles in line were waiting for parts, including another Journey with a bad transmission.
So… they asked if he’d like to test drive the Compass Trail-Hawk package he had his eye on when he walked in? Sure, why not. They ended up giving him enough of a discount on it that, combined with his trade (still sitting on the lot with the bad transmission), he received a total of more than he paid for that Journey back in 2020.
Of course he was thrilled about all of this. I’m hoping the transmission holds up better for him this time around. Regardless, I think it shows just how desperate some of the dealers are to move something off of their lot.
“Who do you think is more likely to turn it around next year? Fisker or Stellantis?”
The log I just laid in the toilet.
Turn it around, and around, and around…
and then down the drain!
Precisely.
I think people got tired of Stellantis reliability and went to Honda because their numbers are doing very well.
The neighbors that have Stellantis products are pre covid time, when rates were pretty low and prices not crazy.
Fisker is a dead man walking. Stellantis is Monty Python’s Black Knight – ’tis but a flesh wound.
Honestly not sure Fisker is walking anymore, but the Black Knight is the perfect analogy for Stellantis.
Stellantis will find a way back, but ho-boy will they be caught with their pants down very quickly.
It’ll once again prove that Europeans have no idea how to make a successful car company in North America, when they get handed the literal golden goose.
Jeep Grand Cherokee should be 36-46K not 48-60k.
I’d imagine that’s where they’ll just about all land when they apply incentives to actually move the product.
No Cherokee sized car in the lineup to compete against RAV4.
Expensive electric coming on line at exact wrong moment.
They are effed.
Definitely Stellantis. Stellantis is HUGE, and even though they are making the (poor?) decisions they are, they still have huge weight behind them. They might suck for a few more years while they figure it out.
Fisker, on the other hand, is like an recovering alcoholic working in a brewery with a wife cheating on them that they aren’t yet aware of, and she is not doing a good job of covering her tracks.
Problem is, Stellantis has too much government involvement to fail. Pieces will be spun off to Chinese OEMs by their new CEO to appease the government and shareholders.
Stellantis/Fiat/Chrysler have been government motors for a large part of their collective existence. Lurching from bailout to bailout over the decades while draining the supporting governments treasuries. They should be broken up and sold off.
I enjoy specific songs from The Arctic Monkeys’ catalogue, but no albums with exception of the one mentioned above.
But tunes like “I Bet You Look Good On The Dancefloor” and “Fluorescent Adolescent” are always welcome listens when they come up on my alternative playlists.
Based on the size of the company and the potential offerings, I feel Stellantis is likely to (eventually) pull out of the tailspin.
Probably after they dump Carlos Tavares Pictured Above, which I have committed to recognizing as his full legal name.
Fisker is now at 2 strikes for trying to make a successful business, I highly doubt a 3rd time will be the charm.
And no one is talking about Mazda here?
+31.5% Y/Y
What happened?
The secret is Mazda makes THE best shade of red in the automotive sphere.
It’s absolutely the best, until it needs repair or matching, then it’s an absolute nightmare. That said, I’ll be in the market for an ND1 come spring, and Soul Red Crystal will be my top choice of color. It’s just so good.
And yet the parking lots are still seas of grey…
That’s the fault of people like my spouse, who wants everything in black. I want COLOUR, much to her dismay. She hated my F150 in “Magma”, but I ADORED that colour-shifting beauty.
Oof, hard agree. Every time I see that gorgeous color I put Mazda at the top of my list for next new cars.
Scientifically proven fact.
CX-5 is such an old design that it prints money and it still sells shockingly well. CX-50 and CX-30 fill the other CUV-obsessed market gaps and the CX-90 apparently is doing better than the CX-9 ever managed.
Good products, a lot of incentives, a slow recovery from the pandemic.
Sounds like an article that could write itself.
Albeit without Carlos (pictured above) Tavares.
No, no. It’s the red paint. I’m sure of it.
Not gonna lie, every time I see Stellantis mentioned in the Morning Dump I look forward to Carlos Tavarez (pictured). Never fails.
I’d like a new(er) Wrangler, my wife would like me to get a newer one as well, but with the prices they’re charging for Wranglers it isn’t going to happen anytime soon. My current one is a 2dr soft-top with a manual, roll-up windows and that’s pretty much it. Good luck finding one of those these days on a lot; instead you’ll find tons of Rubicons etc all overpriced. I don’t need Rubicon-level equipment, just the ability to take off the doors and put the top down and drive on the beach and occasionally over shit.
Used? Sure, I’ll look at used. But new? You gotta be kidding me with those prices, who came up with that price list? SATAN?
Carlos Tavares (pictured above) did portray Satan on SNL once, so yes. Satan priced the Wrangler.
My wife really wants a new Wrangler too. The local dealer doesn’t have a single one that’s under 60k.
Letter 311 states that Stellantis must “Come original”
Otherwise they will continue going “Down”
The company really is all mixed up, don’t to know what to do.
They need to Brainstorm to keep away from their norm.
But keep Amber as the color of their turn signal.
The lack of product planning is honestly kind of astounding. The gap in both product diversity and between ceasing production of old models and releasing new ones is bizarre to the point of malpractice.
Not only that but a complete lack of understanding of the market for the new modes they do launch. Wagoneer/Grand Wagoneer? Seriously confusing naming scheme, and misses the mark on what luxury buyers actually want. Hornet? Wildly too expensive for the class. Grand Cherokee that can’t fit the Hurricane? Astonishing choice. New EV/Hurricane Charger? Will not sell well in the slightest.
Meanwhile the bottom of the market has an aging and still not great Jeep Compass, the new Fiat 500e is a terrible product for the US due to being too expensive, the Jeep 4xe lineup is compelling but horrendously unreliable, and there is no Durango replacement in sight, but they want to shove the Wagoneer S down the sale pipeline as if that will sell more than a few dozen units a month. I’m convinced any reader and commenter on this site could do a better job alone than the entire Stellantis corporate product planning department.
The Hornet is not only astoundingly too expensive but also riddled with problems. Who wants to pay a bunch for a CUV and then have it break all the time? Turns out, not many.
The Hornet is also undersized and way overpowered for a vehicle class that favors utility, economy, and gee-wiz tech over performance. If anything, it should’ve included a basic $28K-$30K trim SXT trim with the Compass’ 2.0T turbo or even the old Cherokee’s NA 2.4L to compete with the Sportages and Rogues of the world.
When it was happening under FCA, it was because Marchionne was preoccupied with merger ideas and wanted to keep the R&D pipeline empty so the combined company could start fresh with shared products for synergy, but a suitable merger partner took way longer to convince than expected
Not sure why Stellantis is continuing the practice, though. Big surprise, you can’t sell many vehicles if you don’t build many vehicles to sell.
They managed to reduce the value of their USA operations down to the assets and nothing else, and even then, their production lines have got to be quickly becoming intractably out of date. Ironically, their only platforms with global synergy center around Alfa. The irony is that they don’t share the RWD platform with anyone else, and the FWD platform (Tonale) has its heritage stretching as far back as the GM-FIAT partnership of 2002. Absolutely incredible
It is 100% to juice short-term profits and the C-suites pay. They’ve basically imperiled the entire company so a handful of extremely wealthy people can get even more money. It should be criminal.
Bizarre thing about it is the Peugeot and Elkann/Agnelli families are very clearly long-term investors here, very much appears that they’re not looking to dump their shares and run within the near future, and yet they’re still letting all this happen instead of firing the people in charge
Even when it is criminal, they never see any consequences.
Besides the lack of product in the pipeline, I don’t get why you’d stop building Challenger/Charger/300s so soon when there was no replacement apparently ready for a year. Does it take that long to retool an assembly line? No one else takes a year off from making cars to retool.
Tavares decreed that they had to stop buying CAFE credits immediately, even if it still financially made sense to do so in the short term, he set a hard deadline to stop, which meant a gap before the new models were ready with no transition period. Even just adjusting the production mix to build a higher ratio of V6s to V8s to reduce the number of credits needed was not going to he considered, it was an ultimatum from the top
“The SEC also said it has asked Fisker where its corporate records will be maintained after a settlement plan is enacted but “has not received any response.”
Umm, SEC? See the previous article. There’s your corporate records… better hurry before they hit a dumpster.
Something about Tavares seems to make him incapable of really seeing the company’s current issues. I admit, there are so many factors that he has to deal with that I can’t even begin to imagine. Yet in spite of that I have my opinions, based strictly on the most scientific assumptions and guesses possible. At this point I’m not sure if Stellantis fixes it, or if Stellantis sells off all its Detroit businesses and someone else tries to right the ship.
Now hear me out. A group of American investors come in and buy the remains of Jeep/Chrysler (and it’s one car)/Dodge under the new name of American Motors Corporation.
Tell me more about this American Motors idea. Would it make cars that fly like Eagles, Sting like Hornets, have a patriotic Spirit or be more of a Rambler?
Will the EV Gremlin have lots of electrical gremlins? I don’t want that anyway but love AMC and have always fantasized about a new AMC Eagle…but only if they do it right and not mess it up (They will, unless The Bishop does it like he’s done w/ AMC car renderings in the past)
It could be run by Mitt Romney. He’ll be looking for something to do in 2025.
Your ideas are intriguing to me, and I wish to subscribe to your newsletter.
I would love to be rich enough to be one of those investors. Alas, it’s not to be.
I think Henrik Fisker and Stellantis would be a match made in … not heaven. But, at least, when the company crashed, there’d be no question as to who was to blame. Luckily, Nick would be there to clean up. Maybe.
I wish Stellantis luck next year, but my guess is Carlos gets the golden boot (paid well to leave) some “former” private equity goon will be named the new CEO, Chrysler, DS, Vauxhall, and Opel will disappear and they’ll try to sell Jeep off to the Chinese, but that’ll somehow get blocked by Congress and somehow the last 2024 Challenger will be sold new in 2058.
That’s an option. I personally think that Dodge and Chrysler will be spun off into their own company, but Stellantis 2.0 will desperately try to hold onto Jeep. Chrysler is all but worthless, and I don’t see the new Dodge vehicles selling very well. Jeep is the golden goose, and Ram is the big money maker in North America.
“Who do you think is more likely to turn it around next year? Fisker or Stellantis?”
stellantis, because
a- they are not yet bankrupt;
b- they still have assets; &
c- they have interested and powerful (nation-state) stakeholders.
“either stuck with a ton of inventory of vehicles (Ram/Jeep/Dodge/Chrysler) or starved of new products (Alfa/Fiat).”
Seems like at least Dodge and Chrysler also belong in the “starved for new product” category.
Oh hey, Mazda is up 17% Y/Y. That’s p neat
Makes this Mazda fan-boy happy, especially since I was all but certain that their “upmarket push” would hurt them.
In retrospect, combining the business acumen of Chrysler with the engineering acumen of Fiat was not the slam dunk we all thought it might be.
Also, badge-engineering every single car across 16 different iconic brands didn’t spark consumer loyalty for some reason.
Badge engineering what, exactly? Chrysler sells 1 vehicle, Dodge sells 3, Fiat sells 1, and Alfa sells 2.
This might be one of the only cases where more badge engineering would help. Bring over some of the DS line as Chryslers to at least give them something to sell FFS.
Yea, completely agreed. It’s the American market that they’re floundering the hardest in. They just kept dropping the relatively lowest margin vehicles until nothing was left, rather than improving some of the Euro econocars to the point where they could be sold here
Things more likely to happen than Stellantis turning things around next year include, but are not limited to:
US Healthcare reform, finding life on Mars, the return of sub-3% mortgage rates, a good Marvel movie coming out, and Haas winning the F1 Constructors Championship.
I think that they’ll both turn it around, unfortunately that will be a constant turn as they race around the bowl. Stellantis will continue in some form. Jeep and other parts have value. Fisker…first turd down.
I’ve never heard of Arctic Monkeys. Do they sing “Last Train to Tuktoyaktuk”?
It’s actually “Last Flight to Ivujivik”. Common mix up, don’t feel bad about it.
I’m more partial to those creepy ass Quiznos Spongemonkeys. They love the subs!
I miss Quizno’s they kind of left my area.