After hailing excellent sales and profits in 2023 despite global struggles and strike action here in America, Stellantis $STLA (STLA) hasn’t been as fortunate so far in 2024. The automaker has seen sales flounder and profits fall, leading shareholders to even threaten legal action against the automaker. Now, the extent of the automaker’s concerns has become clear as CEO Carlos Tavares prepares to travel to Detroit to try and turn fortunes around for the Jeep owner.
Worries started to whirl following Stellantis’ latest financial results, which showed a massive sales drop of around 30 percent for key brands, such as Jeep. This was joined by warnings of falling profits for the automaker, which also owns Fiat, Dodge and Chrysler. Now, industry experts have warned that things are “starting to come apart” at the automaker, reports the Detroit Free Press:
“The rose is off the bloom as far as the Stellantis group goes,” John McElroy, host of “Autoline After Hours,” told the Free Press. “It looked brilliant up until the end of last year and now things are starting to come apart.”
McElroy pointed to the inventory issue as emblematic.
“Undoubtedly there were people who said we have to cut back production, and they were overruled, which I believe was for somebody to make their numbers,” McElroy said, noting that he’d love to know whether that decision was made “in Paris or Auburn Hills.”
“We don’t know for sure what’s been going on here,” he said. “The fact that they’ve lost so many top executives shows that it’s an unhappy situation. I’ve heard from people who work there that morale is bad, and it’s not a happy place to work.”
The company has lost a slew of executives in recent months, announced layoffs at sites across America and has even threatened to cut shifts at its Warren Truck Assembly north of Detroit. The latter has even sparked fears of strike action from the United Auto Workers union less than a year after its last major walkout at Stellantis and fellow Big Three automakers Ford $F (F) and General Motors $GM (GM).
The worries haven’t gone unnoticed by Stellanits higher ups, and company boss Tavares is now reportedly planning an emergency trip to Detroit to try and bring about a turn in fortunes for Stellantis’ North American arm, reports Reuters. According to the site:
While Tavares typically visits the North American operations every four to six weeks according to the source and a second person, one of them added that the CEO’s visit this week during his summer break was meant to send a clear signal.
“He wanted to make clear he was handling it personally,” the source said. “North American operations are basically funding the rest of the group.”
On the agenda will be a new strategy for the North American branch of Stellantis, which Tavares recently said was “humbled” by its latest sales figures. The company boss said Stellantis fell victim to everything from high vehicle inventories, manufacturing issues and “a lack of sophistication,” reports Reuters.
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