Having held the position of Ford National Dealer Council Chairman two years in a row, I feel the pain of Kevin Farrish, the current Stellantis National Dealer Council Chairman. I can only assume that he and the Dealer Council felt that their message was not getting through to the Stellantis CEO Carlos Tavares. I will say it took a lot of guts to put this out in public. I was openly critical of Ford CEO Jac Nasser during my tenure, but don’t think I ever put out anything this strongly worded. I tried to keep as much as possible inside the walls of Ford but was completely transparent with the Ford dealers. It is clear the dealers were irked by the 40 million dollar compensation of the Stellantis CEO last year while they were struggling.
Here is the actual letter sent to the Stellantis CEO by Stellantis dealers, signed by the officers of the Dealer Council. I obtained the letter from a CDJR dealer who did not want to be identified.
In a tersely worded response, Stellantis had this to say:
We take absolute exception to the letter sent by the president of the Stellantis National Dealer Council (NDC), Kevin Farrish. Last month, we introduced an action plan developed with the dealer body that has already shown results. August sales were up 21% over July, market share was up 0.7 points, and dealer inventory was reduced for two consecutive months by 42,000 units or approximately 10% in total.
This is the result of working together with our dealer network and we want to thank them for their constant support and engagement. We meet and talk monthly, have weekly calls and personal conversations at the highest level. This is where such dialogue should take place.
At Stellantis, we don’t believe that public personal attacks, such as the one in the open letter from the NDC president against our CEO, are the most effective way to solve problems. We have started a path that will prove successful. We will continue to work with our dealers to avoid any public disputes that will delay our ability to deliver results.
So where does this go from here? My thoughts:
Time will tell for sure, but the Stellantis CEO needs to listen to the dealers. They are on the front line every day, and they are the face of the brand. I have said on the air recently, within the last month, that I was confused by where Stellantis was headed, and didn’t understand their direction. I also noted that they were not competitive with other automakers when it came to incentives. Stellantis must put their dealers on equal footing with Ford and General Motors, especially when it comes to pickups, and they have not.
I believe what we have here is another automaker that lunged too hard and committed too many monetary resources to electric vehicles, and they did it way too fast. Now, Stellantis is scrambling to reverse course. They previously had said they would build 50% electric vehicles by 2030 and spent billions to try to achieve that. The only problem is that is not what Americans want to buy.
I have to think (and hope) that Council Chairman Farrish spoke extensively with the dealers he represents, that is the cornerstone of the job. For him to take a drastic measure like this, I am confident he had the backing of the Stellantis dealer body.
There are ways both sides can be happy, and Stellantis has to understand that they only have one customer in the United States: the dealers. Without them onboard, the company cannot be successful. It takes compromise and true listening to concerns. Stellantis will have a hard time crying “woe is me” with the profit numbers they are putting up, and since the CEO compensation is public record, Carlos Tavares needs to understand the way this looks to struggling dealers.
I would encourage Mr. Tavares to sit down with the Dealer Council and JUST LISTEN. Don’t come armed with a computer-generated deck of papers to try to persuade the dealers to feel sorry for Stellantis, there is no place for that. Just bring a memo pad and a pen to write down concerns your retailers have. Go back and address them one by one with an open mind. If you truly listen-and respond-Mr. Tavares and get the dealers on your side, instead of fighting against you, you have the greatest chance for success.
My Question To The Stellantis Board
North America is arguably the most important market in the world for Stellantis. Some would say it is Europe, but I disagree. Automotive success here often translates into success in other areas of the world and it rarely works the other way around.
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.
Carlos Tavares, Chief Executive Officer and Executive Director of Stellantis. Photo: Stellantis.