Multinational automaker Stellantis (STLA) , the parent company of some of the most recognizable American auto brands like Dodge, Jeep and Chrysler, has been facing a litany of issues and a mountain of criticism from dealers and even the United Auto Workers union.
According to a recent analysis by auto shopping website CarEdge, six out of the ten slowest-selling cars in the U.S. belong to Stellantis brands, with some having a nearly two-year supply on dealer lots across the country.
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However, while the automaker offers “increased incentives” to clear out its extensive inventory, a massive recall is currently affecting one of its most storied brands: Jeep.
With problems mounting, critics of the brand are pointing the finger at Stellantis CEO Carlos Tavares as the sole person responsible for the mess, but a new report suggests some more dramatic moves at the automaker.
Carlos Tavares, chief executive officer of Stellantis NV, at the Stellantis auto manufacturing plant in Sochaux, France, on Thursday, Oct. 3, 2024.
The Tavares shake-up felt around the world
According to sources inside Stellantis, who recently spoke to Bloomberg, the CEO reportedly plans a major shakeup of managerial roles across its brands and departments.
The outlet reports that his proposal could result in major changes at the manager’s helm in its various key departments, such as regional operations, to those affecting individual brands like Dodge, Jeep, or Chrysler.
The sources say that the proposal could be presented at a board of directors meeting that Tavares plans to attend in the United States, where it may not prove popular amongst the other directors.
Overall, the outlet reports that the meeting is focused on finding ways to accelerate turnaround efforts in the United States, where it admits that it is currently struggling to sell cars.
Jeep vehicles are delivered to a dealership in Chicago, Illinois.
The move comes as Stellantis is entrenched in a wave of other issues generated by industry pressure.
Reports in late September indicated that the automaker was searching for a new CEO in the event that he didn’t sign on in 2026 and, more recently, filed several suits against the United Auto Workers (UAW) union over claims it has vehemently denied.
But if there is any writing on the wall at Stellantis, it would say that action needs to be taken.
In a harrowing statement issued on September 30, the multinational automaker lowered its 2024 financial outlook, reducing its adjusted operating income margin guidance from “double digits” to between 5.5 – 7.0% for 2024, as well as a negative cash flow of between 5 billion and 10 billion euros ($5.58-$11.17 billion).
Stellantis blamed the bleak outlook on factors affecting the North American market, weakening global demand, and intensified competitive dynamics due to rising industry supply and increased competition from China.
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A different course of action
However, action is being taken to help reduce the blow.
In new sales data released on October 1st, Stellantis reported that it sold 305,294 cars across its portfolio in the U.S. during Q3 2024 — a 19.8% drop from the same period last year and an 11.5% drop from the last quarter.
While these numbers indicate the substance of a loss, the automaker assured that an “aggressive incentive program” of bigger and bolder discounts implemented early in the quarter has shown results, noting that dealer inventory has reduced by 50,000 units, or 11.6%.
“These cross-brand incentives, which will continue through the end of the year, also helped to deliver consecutive month total share growth in Q3 from 7.2% in July to 8% in September,” Stellantis U.S. retail sales head Matt Thompson said in its statement on October 1.
Related: Honda’s best-selling cars are facing a massive recall
Additionally, an Oct. 4 report by the Wall Street Journal reported that Stellantis is starting to tighten the belt with its spending, citing an internal email from CFO Natalie Knight sent to company employees with the subject line “The Doghouse is back!”
In it, she instructed her finance team to intensely reevaluate purchase requests from outside vendors to reduce unnecessary expenses, as Doghouse is an internal term that means “much stricter attention and control around purchase requisitions.”
“If we apply more discipline, we can ensure big savings for the company,” Knight said in the email.
Stellantis NV, which trades on the New York Stock Exchange as STLA, is down 0.56% from the opening bell, trading at $13.32 per share at the time of writing.
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