By otakuyassine3@gmail.com 
I was talking with a friend at Stellantis a while back, and they straight-up said they were looking forward to the next regime, whatever may come. With the surprise announcement from Stellantis that CEO Carlos Tavares is resigning, it’s time to consider what can be done to save the American brands of Chrysler, Jeep, Dodge, Eagle, and Ram. Well, maybe not Eagle.
And what of Europe? What should the rest of the brands (Fiat, Lancia, Alfa, Maserati, et cetera) do? I’ve got some thoughts about how new interim boss John Elkann can start to piece the company back together if that’s what he wants.
Why did Tavares leave? Yesterday, I didn’t have an answer, today it’s becoming a little clearer how the final moments played out in the Stellantis bunker somewhere in Amsterdam. It’ll give me a chance to review his term as CEO and make an offer to any other brand that might be interested in picking up his term.
Stellantis Should Move Its Headquarters To Detroit Or Drop North America All Together
When Fiat picked up the various Chrysler brands for a song, the newly merged Fiat Chrysler (FCA) made sure people knew and understood that it was still an American company. Reeling from two failed wars and an economy that was made out of soggy gingerbread, America in the late aughts could be a depressing place. The young company embraced the new administration’s message of hope and Detroit’s underdog spirit to create the “Imported from Detroit” campaign.
It worked. We believed Eminem when he said the vehicles would reflect American attitudes and tastes, even if the guy who ran the company was suddenly a chainsmoking, sweater-wearing Italian. In fact, then-CEO Sergio Marchionne was a constant fixture in North America who was largely liked and accepted by American journalists, execs, and employees.
Carlos Tavares never found that acceptance. A successful CEO in Europe, Tavares stayed mostly European. As head of Opel and Peugeot, Tavares was seen as a smart guy who saw the coming changes to the global car market and began to make the hard decisions necessary to keep those brands afloat long enough to eventually merge with FCA to create Stellantis.
In fairness to Tavares, this was Marchionne’s dream as well. Fiat always wanted to be a bigger global player, and Tavares realized Marchonne’s vision. Unfortunately, Tavares was never equipped to make the deal work. In his selection of managers, his reduction of engineering/product development in Michigan, and his constant bickering with suppliers/workers/governments, Tavares understood the potential of a combined global automaker but never quite understood what to do with it.
In the interim, market share in North America has taken a nosedive, and with it the profits needed to sustain the failing European operation (Stellantis lost a third of its share in Europe since Tavares took over, and Fiat is down by half to just 1.8% of Europe’s total market). Earlier this year I wrote that I didn’t think Stellantis, though coming off a profitable year, would be able to stick the landing. It clearly didn’t.
What can be done? I think Stellantis has two choices:
- Become a more American company
- Spin off the American brands
America needs a fourth major automaker, and Jeep is one of the strongest brands in the world, other than maybe Tesla or Ferrari. IF Stellantis wants to keep the American arm it needs to invest in making good products with American engineers, marketers, and designers. Tavares arrogantly assumed he could outsource much of the work to Europe, Brazil, and India.
In the impending Trump era, it’s clear that there’s going to be an industrial policy here that favors American production. Honestly, even if Harris had been elected, I think this was going to be the case. Rather than fight it, Stellantis needs to embrace it with vehicles and concepts that make the various brands fit within an American portfolio and not a ‘House of Brands’ that also includes Alfa, Fiat, and Maserati.
In fact, Fiat, Alfa, and Maserati have to leave North America. It was a fun experiment and it didn’t work. Oh well.
Dodge needs new products, badly, and it needs them to cover the entry-level of the market that the Korean and Japanese automakers are dominating. Ram needs to become a part of Dodge. While the Wagoneer and Wagoneer S can stay, Jeep needs to offer a fuller and better (newer!) range of crossovers on the lower/middle end of the market. Chrysler needs some flagships and, in fact, Chrysler should have been the EV brand all along while Pacifica should become the Dodge Grand Caravan again. That’s three brands, all distinct, that make sense. Make Ralph Gilles CEO. Easy. Done.
If Stellantis can’t do that, it should just let the American brands become a new company as it did with Ferrari. It worked out for Ferrari and it can work out for the newly re-minted Chrysler Corporation (with Ralph Gilles as CEO, just saying). It’s probably a bad time to become a public company, so I’m not sure how that’ll work, but perhaps there’s enough private capital out there to try.
What About The Rest Of The Brand?
John Elkann, pictured above with his brother Lapo and his sister Ginvera, is the Chair of Stellantis, CEO of Ferrari/Stellantis shareholder Exor. He’s also the grandson of famous Italian industrialist Gianni Agnelli and has long operated as the family leader following the death of his uncle.
He’s going to be running the company in the interim, and he’s going to have to help pick a leader with a vision for Stellantis. I’ve explained what I, a humble blogger, think needs to be done in North America. What about Europe?
Sell Peugeot and Citroën to Renault. Just get rid of it. It’ll make everyone happier and Renault has a hot hand right now. Sell Maserati to a Chinese automaker. Keep Alfa Romeo and let it be a sister brand to Ferrari so Ferrari dealers can get a car to its clients while its clients wait two years for a Ferrari. Fiat can be an Italian brand again, and one with eyes on cheaper cars in Europe and South America. OR, just sell that as well.
Honestly, the car business is an old business and you’ve already got Ferrari. What do you even want Fiat for? Let that be someone else’s problem.
Carlos Tavares Took The Money And Ran Away
Friends, readers, CJDR dealers, lend me your ears. I come to bury Stellantis CEO Carlos Tavares, not praise him. The capital expenditures men do live after them; the higher margin quarters often interred with their bones. So let it be with Carlos.
Tavares, not pictured above, is an interesting character. His reputation coming into the Stellantis deal was stellar. As longtime auto exec Dr. Andy Palmer put it, “Carlos is perhaps the most professional car guy I’ve worked with. He’s created some of the most iconic cars, including the Renault Megane series. That Stellantis exists at all is all down to Carlos.” He also added that Carlos is also a “bloody good driver.”
Other than Elon Musk, Carlos Tavares is probably the highest-paid automotive CEO in the world, having made about $40 million in 2023. He did it by driving margins up on cars in America by squeezing out the same old products at a much higher price to consumers who didn’t have much of a choice. It worked until it didn’t and, unlike his former boss Carlos Ghosn, it seems like Tavares is going to get out with the money. His reputation? That’s another story and seems related to why Tavares left.
Here’s what Reuters is reporting, though I haven’t heard the Tavares side of it yet:
A source familiar with the matter told Reuters that tensions grew after the board felt Tavares was moving too quickly and focusing on near-term solutions to save his reputation, not working in the best interests of the company.
The sudden announcement on Sunday indicated that the fissures between the board and Tavares had to be severe, given that the parties decided it was better to operate with no CEO on a short-term basis, Bernstein analysts said.
Yikes. Once the company announced it wasn’t going to pick up the Tavares contract it didn’t really make sense to keep him on as his motivations would be either to make as much money as possible or, as indicated above, try to make himself look better.
Here’s the kicker on that article, by the way:
“Tavares is leaving behind a mess of painful layoffs and overpriced vehicles sitting on dealership lots,” UAW President Shawn Fain said in a statement.
Double yikes.
Someone, Please Hire Carlos Tavares
I’ve been doing this bit with Carlos Tavares, pictured above, since at least February. The basic premise of the joke is that the actor Jon Lovitz tends to play characters who are always willing to say or do anything to get an advantage over other people.
I truly enjoy this bit and would like to see it continue. I also think Tavares blundered this, but he does have a great history and loves old cars.
So here’s my deal: If you’re a struggling automaker, an upstart firm, or any other carmaker in need of a CEO, please hire Carlos. If only to keep this joke going I will write more about KTM or Polestar or whatever way more than I would if you hired some normal MBA exec person.
What I’m Listening To While Writing TMD
With a shoutout to SWG, here’s a little Paul Simon from the excellent “Graceland” doing “Diamonds on the Soles of her Shoes.”
The Big Question
Do you also agree that Ralph Gilles should take over Stellantis? If not Ralph, then who would you pick?
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