Stellantis CEO Carlos Tavares lost control of the automaker with 'arrogant' mistakes, sources say by Sources told CNBC that Carlos Tavares was fixated on near-term costs and profits to the detriment of the business as well as the company's products.
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Stellantis: A Perfect Storm in the Making? After a record-breaking 2023, where profits soared, Stellantis (parent company of Dodge, Jeep, Chrysler, Ram, FIAT, Peugeot, and more) is now facing significant headwinds. Q3 2024 sales have plummeted nearly 30%, signaling a sharp downturn for the automaker. The warning signs were there: shrinking market share for key brands, rising incentives, and operational inefficiencies. Here’s what’s contributing to the storm: 🔹 Pricing pressures: Elevated vehicle prices have made Stellantis less competitive in the market. 🔹 Inventory challenges: Bloated inventories now require steeper discounts to clear, eroding margins. 🔹 Leadership disconnect: Senior management operates out of Europe, while the U.S. — the largest driver of sales and profits — takes a back seat. Adding to this, management has been labeled as "arrogant." 🔹 Strained relationships: Friction with union workers and dealers further compounds operational challenges. 🔹 Cost-cutting risks: While trimming expenses is necessary, compromising on quality for the sake of short-term targets can harm the company’s long-term viability. What are your thoughts on the challenges automakers face in balancing profitability, relationships, and quality? Here are a few links of interest: https://lnkd.in/druHrn22 https://lnkd.in/dN4UwYrk https://lnkd.in/dvZWaxGc https://lnkd.in/d5ghFAxA
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Shows how important it is to have a future strategy to what happens after cost cutting no longer is going to “cut” it. Only focusing on cost cutting and margin improvement without having a future plan and understanding what your customers expect from you as business is the receipe for long term failure. On the top, if you no longer have any suppliers or strategic partners then your strategy and your customers is left without a product, then what do you sell??
The Rise and Fall of Carlos Tavares 🪂 Last week, Stellantis fired its CEO. While his extreme cost-cutting initially delivered results, he ultimately went too far. The impact of his approach: ✓ Profits collapsed and the stock plummeted 40% ✓ Massive price hikes to protect margins left dealers stuck with overpriced inventory ✓ Suppliers abandoned Stellantis, exhausted by relentless pressure ✓ Quality issues and increasing recalls The situation escalated in November. When the board questioned his approach, he answered: "This isn't your business - stay out." His solution? Double down on cost pressure. ↓ The case perfectly illustrates a central dilemma. The automotive industry faces its greatest transformation: 1) From hardware to software 2) From combustion to electric 3) From manual to autonomous driving In short: Everything is changing. In their search for answers, many established manufacturers retreat to what worked in the past. They focus on squeezing the last bits of efficiency from their old business model. Here's the problem: In times of disruption, that's not enough. When you only optimize instead of reinventing yourself, you still decline. You might be a bit more efficient on the way down, but you're still going down. Read the full analysis in my newsletter: https://lnkd.in/gkGE-d3y What's your take: Was Tavares ultimately good or bad for Stellantis? And can traditional automakers still master this transformation? -- PS: After many have asked - I just launched the English version of my newsletter. The German original reaches 15k readers weekly. Subscribe for free. #automotive #stellantis #tavares #disruption
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Another one bites the dust: Stellantis CEO Carlos Tavares resigns - https://lnkd.in/gpKkrFz4 The so-called "green revolution" is compelling the entire automotive industry in Europe and America to relinquish their competitive advantages, such as their platforms, models, factories, machinery, engines, and innovations. Instead, they are expected to adopt practices that offer minimal competitive benefits.
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#EXCLUSIVE: If you thought Stellantis #CEO Carlos #Tavares was going to hit pause on his relentless cost drive, think again. The 66-year-old executive is doubling down on #savings across the board. Some cuts have been announced already, others are in the works. Even #French workers are now trying to #fight back after recent voicing of #union discontent in #Italy and the #US. At the maker of Jeep, Peugeot and Alfa Romeo cars, ``it seems that anything is permitted” to preserve double-digit #profit #margins, according to a document by the white-collar employees’ group CFE-CGC union obtained by Bloomberg. ``No longer investing in the future, reducing payroll, no longer allowing current expenses, no longer paying your suppliers, no longer compensating customers who have problems.” True, the #auto environment is tough everywhere. Still, what worries countless people I’ve spoken to within #Stellantis is that the years of #pressure Tavares has applied to employees has gone too far and been #detrimental to the business and the group's (amazing) #brands. Managers are exasperated to see valuable members of their teams repeatedly getting nudged to accept supposedly voluntary #departure packages. The loss of skills is massive and this is putting the company's future at risk, they say. Pour Carlos Tavares, c'est la fuite en avant. La chasse aux coûts, impitoyable, continue partout. Le directeur général refuse de s’interroger - au moins pour l'instant - sur les consequences long terme d'une strategie qui ne seduit plus ni les investisseurs, ni les analystes financiers. Read more 👇 #EVs #autoindustry #corporategovernance #uaw #detroit #paris #mirafiori #jobcuts #costdrive #carsindustry #electrification #suppliers #budgetcuts #laborunions #torino #toofar #broken
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A timely and insightful article on the recent developments at Stellantis! In the few past years, while investors reveled in swift profits thanks to Tavares' impressive cost management, it appears that strategic focus on customer and market position has taken a backseat (see link in the comments). #margins #automotive #WhenItReallyMatters https://lnkd.in/e_7Hkb2C
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https://lnkd.in/gud58gPz Big Three automaker Stellantis is making a number of moves in the US, in response to the new Trump administration and its focus on building products in America.
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Finance Director | Head of Finance | Financial Controller | Group Finance Manager | Senior Finance Consultant
Stellantis Faces Significant Challenges Amidst Market Shifts! Shares of Stellantis, the parent company of Chrysler, Ram, Jeep, and other well-known brands, plummeted nearly 14% following a stark revision of their full-year profitability forecasts. The Italian-American automaker cites weaker global sales and intensifying competition from Chinese electric vehicle manufacturers as key factors influencing this downward trend. In their recent statement, Stellantis indicated that they expect to be "considerably less profitable" in 2024 than previously projected, with operational expenditures set to exceed cash flow. To adapt, the company plans to reduce inventory levels in the U.S. and ship 200,000 fewer vehicles to North American dealers in the latter half of 2024 compared to the previous year. This news comes on the heels of similar announcements from other major players like Volkswagen and Aston Martin, who are also grappling with a challenging market landscape characterized by declining demand and increased competition. As we witness the evolving automotive landscape, it’s essential to recognize the pressures traditional automakers face against a backdrop of rising competition from agile EV startups. The industry's shift towards electric vehicles is not just a trend but a fundamental transformation that requires established players to rethink strategies, innovate rapidly, and enhance operational efficiency. For professionals in the automotive sector and beyond, this situation underscores the importance of agility and foresight in business planning. #AutomotiveIndustry #MarketChallenges #EVRevolution #Stellantis #BusinessStrategy
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Rivian Automotive has received conditional approval for a loan of up to US$6.6 billion from the U.S. Department of Energy. Source: https://loom.ly/iKzXWqw $VBAM $VBAMF
