Stellantis Is Already Looking For A New CEO

Is it “good to be the king” as Mel Brooks insists? Or, in fact, is Shakespeare’s King Henry correct when he complains “heavy is the head that wears the crown?” If you’re Stellantis CEO Carlos Tavares you might be more inclined to believe the latter.

Succession drama always makes me think of Shakespeare, so I’m going to make this a Bard-inspired folio of The Morning Dump today. “Something is rotten in the state of… Holland” (which is close enough to Denmark) and the board of Stellantis is already looking to replace poor Carlos. Alas, poor Carlos, I knew him well. A man of infinite jest, at least for news roundup writers.

Can you blame them? The castle grounds are being stormed from inside and it’s UAW’s Shawn Fain leading the charge. Does this make Fain the MacDuff? Or as a commoner is he more a Dogberry, spouting off what seems like nonsense but is actually sense? I guess it depends on whom you ask.

Stellantis has a plan! Though, as Hamlet observed, every plan digs its own grave upon birth. This one involves cutting inventory, instead of heads. And, finally, Stellantis has a friend in China’s Leapomotor because what Stellantis needs now is another brand. Will it offer the loyal service of Tranio or the questionable friendship of Proteus?

Sober up, my groundlings, it’s time for Much Ado About Stellantis.

Carlos The Boss Is Quite Possibly Toast

“With all my heart I’ll gossip at this feast.” – Comedy of Errors

Am I going to regret trying to make this whole thing Shakespearean? Friend, I already do. But the fools are always my favorite Shakespearean characters and, on my better days, I think I’d make a decent Falstaff.

Carlos Tavares, pictured above, may not make the last syllable of recorded time. Here it is from Bloomberg who first reported it:

Stellantis NV Chairman John Elkann has started a search for a successor to Chief Executive Officer Carlos Tavares, whose contract runs out in early 2026.

The automaker confirmed the decision and said it’s part of regular succession planning after questions from Bloomberg News. Pressure on the CEO is rising due to Stellantis’ poor performance in markets including the US, its biggest single profit pool.

Elkann has no plans for an immediate leadership change and Tavares will be included in the search process, according to people familiar with the matter. Still, the chairman is increasingly dissatisfied with the situation in North America, where sales have been slowing and several executives left the company, said the people, who asked not to be identified discussing internal matters. Elkann is also CEO of Exor NV, the largest shareholder in Stellantis.

I’ve been a little hard on Tavares myself, pointing out his high pay, his ability to turn allies against his own company, and the absence of an obvious plan for the future. To his credit, Tavares has called his perception of the company’s prospects in North America “arrogant” and has pointed out a lot of issues with Stellantis has to face.

Tavares isn’t young, but he isn’t old, and it wouldn’t be out of the question for him to serve another five-year term after this one is up. If you’d have asked me a couple of years ago, while the company was raking in profits, if that was the most likely outcome I’d have probably said yes. Not anymore.

Is this all sound and fury, signifying nothing? I’ll refer you to this Associated Press article on the topic:

Erik Gordon, a University of Michigan business and law professor, said the company’s confirmation of the search likely means that the board has reached a deal for Tavares to leave.

“I think they recognize that it’s best for the company to have a new CEO,” said Gordon, who has advised corporations on leadership succession plans. “Stellantis is taking a lot of hits within the U.S.”

Companies, he said, try to change leaders in a peaceful and organized way. “They don’t want it to look like chaos, they don’t want it to look like panic. They want it to look like this is the normal, responsible way we do things.”

All’s well that ends well, I suppose.

Stellantis Blames The Man They Call Shawn Fain

“Come, let them be opinioned.” – Much Ado About Nothing

After decades of UAW presidents who were uncomfortably cozy with leadership, Stellantis is suddenly facing a foe who literally drinks from a mug of boss’s tears. To call Shawn Fain antagonistic is a dramatic understatement worthy of that guy from Stratford-upon-Avon. You’d be better off sending your ladyfriend to Vegas with that fella named Iago than to turn your back on Fain.

The latest kerfuffle is over the commitments Stellantis made to the UAW in its latest contract (called Letter 311). Fain has indicated his belief that the automaker is trying to weasel out of its deal, leading Stellantis to send out a press release castigating the UAW leader:

Stellantis stands by its position that it has honored its commitments under the 2023 collective bargaining agreement. Here are the facts:

• The language in Letter 311 is clear. It states that the investments and allocations set forth in Letter 311 ‘are subject to approval by the Stellantis product Allocation Committee and contingent upon plant performance, changes in market conditions, and customer demand continuing to generate sustainable and profitable volumes’ for the relevant facility. The investments and timelines are not absolute guarantees, as Fain has wrongly and repeatedly characterized, but contingent upon numerous factors, including market conditions.

• There is indisputable volatility in the market, especially as the industry transitions to an electrified future. Many automakers are revising their plans. Over the last year, there have been numerous announcements of investment and product delays as well as outright product cancelations across the industry, leading one respected automotive consulting company to revise its ‘24 EV sales projections down 25% (note: 9% from 12%). The evidence of a dramatic transformation of the industry and its effects on the market is clear.

• The decision to delay the timeline for the Belvidere plant allocations is consistent with the current challenging automotive landscape and the plain language of Letter 311.

• Contrary to Fain’s narrative, the Company has not made an announcement regarding the production allocation of the next generation Dodge Durango.

• Stellantis has announced investments of $6.2 billion in Kokomo, in 2022 and 2023, respectively. With those investments plus the recently announced +$400 million in Michigan, we have actually announced about 30% of the nearly $19 billion that is included in the 2023 agreement, not just 2% as Fain claims.

I gotta say “has not made an announcement” is not the same as “we aren’t doing it.” I think the PR department doth protest too much.

Stellantis Says it Will Get Itself ‘Clean’

“Out, damned spot! out, I say!” – Macbeth

Stellantis has the highest inventory of any major brand, leading its dealers to declare the company’s current situation a “disaster.” What’s the solution?

From the Detroit Free Press we have this plan:

[O]n Monday, Chief Financial Officer Natalie Knight said the company will cut inventories by 100,000 vehicles by the beginning of 2025.

“I just want to make really clear that from my point of view, if we have to make a trade-off, getting ourself clean for ‘25 is definitely going to be our top priority,” she said during a conference call with Bank of America analysts for the 2024 European Autos and Future Car Virtual Conference.

In the short term, presumably, that means more incentives. In the medium term that’s… less production?

Is Leapmotor The Stellantis Savior?

“He that outlives this day, and comes safe home,
Will stand a tip-toe when the day is named,” – Henry V

If there’s a Stellantis product I’m most excited about, it’s probably the Ramcharger. But give me two choices and I’ll definitely have the Leapmotor T03 in there. Leapmotor is now the 15th brand for Stellantis as the company has taken a 51% share in the Chinese-based joint venture.

While it’s nothing special to look at or, probably, drive, it is a very cheap electric car (about $21,000 before incentives) and offers a decent city range of over 240 miles (WLTP urban cycle). According to Reuters, the initial run will be built in China, but production will soon begin in the Stellantis plant in Tychy, Poland, where it should avoid tariffs.

And what of the other cars from Leapmotor like the C10? From Reuters:

Stellantis CEO Carlos Tavares has hinted the C10 model could be manufactured in Europe, but has not provided details.

Leapmotor, which will serve as Stellantis’ 15th brand, will help the world’s fourth-largest automaker widen its range of affordable EVs, as it presses ahead with electrification and seeks to comply with EU emission rules at a time of soft global demand for EVs

Carlos Tavares has said the industry is in a race for survival and this partnership could be one way Stellantis makes it to the other side, even if it gets there without him.

The Morning Dump Musical Choice Today

Why yes, I did pick Radiohead’s “Talk Show Host” for today’s TMD musical accompaniment. For no reason at all…

The Question I Ask At TMD’s End

Who is your pick for the next CEO of Stellantis?

Lead photo: Office Space