Stellantis, the multinational automotive company formed through a merger between Fiat Chrysler and France’s PSA Groupe, is facing criticism from its U.S. dealer network and the United Auto Workers (UAW) union. The company’s recent sales declines, factory production cuts, and other decisions have raised concerns among dealers and employees about the future of the automaker’s business.
In an open letter to CEO Carlos Tavares, Kevin Farrish, the head of Stellantis’ U.S. dealer council, expressed disappointment with the company’s prioritization of profits over sales, market share, and brand reputation. Farrish highlighted the significant decrease in market share, the declining stock price, plant closures, layoffs, and the departure of key executives. He accused Tavares of making reckless short-term decisions to boost profits and enhance his compensation, resulting in the rapid degradation of the company’s brands.
Stellantis responded to the letter, expressing absolute exception to its content. The company cited a 21% increase in August sales compared to the previous month and emphasized the action plan developed in collaboration with the dealer body. Stellantis stated that it does not believe public personal attacks are the most effective way to solve problems and expressed a commitment to working with dealers to deliver results.
Despite reporting a record profit in 2023, Stellantis has experienced a decline in net profit for the first half of this year. The company’s stock has also fallen approximately 36% in 2024. Tavares has been implementing cost-cutting measures since the merger, aiming to increase profits and double revenue by 2030. These measures have included reshaping the supply chain, reducing headcount, and cutting vehicle production at plants.
The criticism from Stellantis’ U.S. dealer network and the UAW has intensified the pressure on Tavares. Some Stellantis executives believe the earlier cost-cutting measures were effective, while others describe them as excessive. UAW President Shawn Fain has publicly accused Tavares of price gouging consumers and failing to uphold parts of the union’s labor contract.
The decline in sales for Stellantis in recent years is concerning, especially when compared to the overall growth of the U.S. new light-duty vehicle sales market. While the market saw a 13% increase last year, Stellantis experienced a decline of approximately 1%. These figures indicate that the company is not keeping up with its competitors and raises questions about its strategy and decision-making.
The criticism from dealers and the UAW, along with the decline in sales and stock price, highlight the challenges facing Stellantis. The company will need to address these concerns and make strategic decisions to regain market share and improve its financial performance. As the automotive industry continues to evolve, Stellantis must adapt and find ways to meet the changing demands of consumers while maintaining the trust and support of its dealers and employees.
