We got word this past Sunday that Stellantis (formerly FCA, the parent of Chrysler, Dodge, Jeep, Ram, Fiat, Alfa Romeo, and Maserati) CEO Carlos Tavares has stepped down from his position. In a Stellantis press release, the company said the Board of Directors accepted Tavares resignation, adding “in recent weeks different views have emerged which have resulted in the Board and the CEO coming to today’s decision.” In other words, Tavares was told to resign and effectively fired.
To those of us in the auto industry, this was not a surprise in the least. I will say that I did not expect the move until the first week of January 2025. There were many signs pointing to this departure. The first was a letter written openly to Tavares and signed by the FCA Dealer Council. I wrote about this on September 16, 2024, and if you missed it you can read it here:
Stellantis vs. Dodge Chrysler Jeep Ram Dealers: My Commentary →
So, the question the Stellantis Board of Directors has to answer is: Can a Portuguese-born CEO whose claim to fame came from success at Renault, understand the needs and more importantly, the wants of Americans? Does Mr. Tavares know what a Hemi is? Does he know the heritage of the Dodge Brothers? Was it Tavares who made the call to take the iconic Charger and Challenger electric? Finally, is he calling all the shots for the decisions in the United States, either directly or indirectly? Does he understand the mystique and history behind the legendary Jeep Wrangler?
Board, the bigger concern, at least for me is, why the sudden departure of some really talented car guys and gals? Five executives have exited Stellantis in the United States this year. Most notable is Tim Kuniskis, the U.S. head of Dodge and Ram. He was one of the most respected car minds in America. He was on the Car Pro Show with us a few years ago and was a great guy and super-sharp. Jim Morrison was a brilliant guy as well and guided the Jeep brand masterfully. Jason Stoicevich looked like an awesome hire to head up U.S. sales, but he only lasted two months. Did anybody bother to ask why?
Board, you need to put these three people on a plane and fly them to the Netherlands and ask some questions. Has Carlos Tavares created a bad culture? What is the real reason they left? The answer could be very beneficial to the future of Stellantis. You are supposed to protect the shareholders of Stellantis. You cannot be a successful car company without success in America. Does your CEO have Stellantis headed in the right direction?
I would suggest that the answer is no.
It would appear the Board felt Stellantis was indeed, not headed in the right direction. In my opinion, Tavares made decisions earlier this year to cut back in many areas that he should not have for a short-sided gain to the bottom line. Sales have been down in the U.S. primarily because of the lack of customer incentives and a lack of marketing. I believe this lack of support was the reason for the unprecedented open letter written by the Dealer Council. Stellantis stock prices also fell 40% this year, and Tavares was at odds with the UAW, although as combative as the UAW head is, I can’t blame him for that.
The next concern I have is that the Board of Directors are giving themselves six months to find a successor to Tavares. While I am in favor of them making the right decision, running a huge car company by committee can drag needed change down and make it slower at a time when change needs to happen quickly, especially here in the U.S. market, during the best time of the year.
While the sales climate here has improved of late, dealers are still fighting bloated inventories and could use more incentive enhancements and financial assistance with the huge amounts of money they are paying on inventory that is sitting dormant on the lots. Stellantis must figure out a way to help the retailers sell vehicles and have confidence that factory support will continue. If Stellantis does that, the dealers will start ordering vehicles again and Stellantis can start producing larger numbers of vehicles, which is the best way to pad the bottom line.
The challenges ahead and the decisions that have to be made must be made correctly. Immediate issues I see involve duplicate products across the brands, and how to build an identity for the brands that are really struggling. Ram trucks are easy, keep doing what you’ve been doing, but keep incentives competitive with Ford and General Motors. Jeep is iconic and much loved, but the large SUVs like Grand Wagoneer now top out in six-figure window sticker prices, something traditional Jeep buyers cannot afford.
Then there is Chrysler, with an aged Chrysler 300 sedan with just 2023 models left, an aged Voyager that was resurrected, and the Pacifica minivan, which has never been very successful. Is it time to say goodbye to the iconic brand? That decision must be made, but I’d sure hate to be the one to decide that.
Of course, we have Dodge, the performance brand that is trying to remake itself as an electric car with Charger and Challenger. While the new products look great and performance numbers are impressive, did someone think that the V8 horsepower-hungry Americans that have loved these products time and time again were going to go plug their hotrods in? That is a resounding no. For those people, it’s a Hemi or nothing. Durango is a wonderful SUV, but it too, is aged. Hornet? A totally botched product that appeals to no one, is overpriced, and dead inventory on dealer’s lots.
Maserati? UGH. Maserati is a wonderful car, I leased one myself in 2018 and loved the car, it was a Quattroporte Granlusso and it was spectacular to drive, had the nicest interior I’d ever seen, and was a true luxury car. In three years, it dropped in value from its $135,000 MSRP to a $38,000 trade value with just 4,000 miles on the odometer.
I shake my head when someone says Fiat. When is the last time you saw one on the road? I checked one of my Dodge Chrysler Ram Jeep dealers that also carries Fiat, and of 237 new vehicles on the ground, they had ONE Fiat, and you can bet the factory forced them to take that one. To make matters worse, when the remaining gasoline Fiat 500s are gone, they’ll be totally electric. So, we’ll have an unattractive small car that Americans have never accepted, which is going to become all-electric, which Americans have also soundly rejected in large numbers. What could possibly go wrong?
Alfa Romeo is in the same boat as Fiat, except not all-electric. A brand that is seldom on the consideration list of prospective buyers, it suffers from a poor quality reputation, and is hard to sell in America. I think it is time to say goodbye to the Fiat and Alfa brands in the U.S. Far better brands have gone by the wayside in the past decade, and nobody has looked back on those decisions. Think Pontiac, Oldsmobile, Hummer as a brand, and some might argue Mercury and Saturn.
There you have it. These are just a few of the questions the new CEO must answer, and he or she has to get it right. I don’t envy this person. Logically, Stellantis needs to become a smaller company, concentrate on being competitive, do away with the duplications in the lineup, embrace and support the dealers, and produce exciting products that people want to purchase. This will be no easy feat. If they hire someone from outside the auto industry, they’ll look things over and wonder how things got in the mess they are. I have to admit, I wonder that, too. This can be fixed, and with the right CEO, it can right itself quickly, and I truly hope that happens. We need successful Dodge, Chrysler, Jeep, and Ram brands.
For today, I say an early MERRY CHRISTMAS! to the FCA dealers in America. Your future is brighter without Carlos Tavares.
Former Stellantis CEO Carlos Tavares. Photo: Stellantis.
