Multinational automaker Stellantis (STLA) is going through a rough patch following disappointing first-half earnings results disclosed in late July 2024.
Since then, the company has been aggressively implementing cost-cutting measures such as voluntary buyouts for white-collar employees and layoffs of more than 2,450 assembly line workers following the discontinuation of the Ram 1500 Classic.
With more than 14 brands under its belt, ranging from European staples like Fiat to American brands like Chrysler and Dodge, Stellantis’ success rests on some players that could drag them down. Knowing this, Tavares gave a stern warning to the many brands in its portfolio that may be acting as dead weight.
“If they don’t make money, we’ll shut them down,” Tavares threatened during the call. “We cannot afford to have brands that do not make money.”
Although Stellantis has shut down speculation about the fate of certain brands like Maserati, a new development has emerged due to an outside player butting into its business.
Chrysler 300C
A response to Rhodes’ manifesto
On August 22, Walter B. Rhodes, the great-grandson of Chrysler founder Walter P. Chrysler, wrote an open letter seeking to gather investors and workers to collectively save Chrysler, Dodge, Jeep, and Ram from what he sees as Stellantis’s mismanagement.
In a plea in both written and video form, Rhodes highlighted Chrysler’s place within American automotive history and criticized Stellantis’ leadership for being “out of touch” with American buyers and not giving the brand enough attention.
“The Chrysler brand, once a symbol of innovation and American ingenuity, is now at risk of fading into obscurity due to what I believe are poor decisions and mismanagement by its current owners, Stellantis,” Rhodes wrote.
Related: Chrysler heir shares plan to rescue his family’s brand from Stellantis
However, on August 30, Stellantis released a statement that indirectly responds to Rhode and reaffirms its position over the brands.
“Stellantis acknowledges the interest in its North American brands and reaffirms the Company’s commitment to its entire portfolio of 14 powerful, iconic brands, which were each given a 10-year timeframe to build a profitable and sustainable business,” the statement said.
“Like the Jeep and Ram brands, Chrysler and Dodge are at the forefront of Stellantis’ transformation to clean mobility, benefitting from the group’s cutting-edge technology and scale. The Company is not pursuing splitting off any of its brands.”
It is important to note that this is not the first time that Rhodes has intervened in such a manner. In December 2020, Rhodes requested that the then-Fiat Chrysler Automobiles (FCA) reconsider merging with the Peugeot company to form today’s Stellantis.
More Automotive:
The Toyota Crown is a masterclass in cheap, quiet luxuryFord making radical change that might anger loyal consumersGavin Newsom’s ‘EV mandate’ is under U.S. Supreme Court threat
He proposed changing the company’s name to Chrysler-Dodge-Jeep-Ram Corporation and moving its headquarters to the United States, among other changes.
Unfortunately, Rhode’s plan has not come to fruition.
In response to the latest rejection, Rhodes told the Detroit Free Press that he was disappointed to find out about the news through a statement to the media instead of someone at Stellantis contacting him.
“Since I sent the proposal to Carlos Tavares, and Christine Feuell (CEO of Chrysler Group), I expected the courtesy of their reply to come directly to me,” Rhodes said. “I hope that in the future we will have direct communications, or at least copied. I will have a formal reply on Tuesday.”
In a new statement published on Mopar blog Mopar Insiders, Rhodes clarified his intent with the original letter and proposal to Stellantis, noting that he does not seek to own the brands himself, but potentially through an employee-owner system.
“My letter to Stellantis gave the wrong impression that I personally want to buy back Chrysler and the affiliated brands. My ultimate goal is for this company to be brought back to America under American ownership. In my opinion, the best path forward is possibly for the union to become involved with employee ownership.”
Stellantis N.V., which trades on the New York Stock Exchange as STLA, is down 4.74% from the opening bell, trading at $15.98 at the time of writing.
Related: Veteran fund manager sees world of pain coming for stocks
