Yardbird
Senior Member
Stellantis Backtracks: Troubled Brands Only Safe For Two More Years
Story by Evan Williams• 3 min read
When Stellantis was created in 2021, CEO Carlos Tavares told each of the company's 14 brands that they had 10 years of time and funding to prove themselves. With the company struggling, that time has been cut short. Automotive News reports that the automaker now plans to review the future of the brands as early as 2026. "We will review each brand's performance at about two-thirds of the way through the Dare Forward 2030 plan, so you could expect decisions in two to three years," Tavares told a group of journalists at the Paris auto show. One can't help but wonder if that means brands like Chrysler, which only has the Pacifica on sale, could soon be on the chopping block.
10-Year Plan Has Just Been Slashed
Tavares revealed that only the first five years of the product transition plan had been funded. So, while we had been told brands would have plans for their new vehicle offerings going forward all the way to 2031, not all of that time had been paid for. Once the cash runs out, it's sink or swim for the company's wide stable of brands.
Carlos Tavares says this could be the only way to compete with affordable Chinese EV brands.
"So far we delivered on our commitments, we already launched the STLA Medium platform which debuted with the Peugeot 3008 and, when needed, we re-scheduled some product launches due to changing conditions, but we did not cancel any," Tavares said.
Tough Decisions Will Fall On New CEO
Tavares is on his way out the door around the same time. The CEO has faced stiff criticism from dealers in the US and Europe, with retailers blaming him for falling sales and profits. Stellantis is expected to end the year with negative cash flows of $5.5 billion-$11.2 billion instead of the original positive cash flow forecast. The automaker's board has confirmed that it is not planning to renew his contract, so he will be stepping down when it ends in 2026.
That puts the tough task of sorting through the 14 Stellantis brands on the new CEO. If brands, models, or even simply production facilities face closure, it will cause problems for the company somewhere. The United Auto Workers, the company's US union, is already talking strikes over changes to the company's plans for plants in the US. Italian labor unions have called for strikes and demonstrations this week over similar concerns there.
It's no wonder Tavares is ready to step away from it all. But it will certainly be a challenge for whoever takes over the reins at the company. That executive will likely be forced to pare down a list of brands that runs from Abarth to Vauxhall, including Chrysler, Jeep, Alfa Romeo, and Peugeot. Each of the 14 brands has decades or even centuries of history behind it.
It doesn't matter if you build the best cars in the world, if no one's buying them, you're failing as an automaker.
At least more mergers are not on the table. Stellantis chair (and largest shareholder) John Elkann told AFP that the automaker was not looking for more consolidation. "We, as Stellantis, consider that we have a competitive size," he said.
While Elkann said the company wouldn't be adding brands, it also wasn't planning to sell. "We're not ready to consolidate, but we're not ready to deconsolidate. This is not the time," he told AFP, adding that he had said no to offers from Chinese competitors.
https://www.msn.com/en-us/money/com...S&cvid=8a265d81f8a24783ab1aedcef5ac7e37&ei=17
