What Stellantis Must Do to Thrive, or Even Survive
It’s difficult to read anything particularly positive about the abrupt on-a-Sunday departure of Stellantis CEO Carlos Tavares—it’s clear that he was not a beloved, team-building figure, and few begged him to stay. A statement issued by Shawn Fain, president of the United Auto Workers, said this: “For weeks, thousands of UAW members at Stellantis have been calling for the company to fire Carlos Tavares due to his reckless mismanagement of the company.”
In a sense, Fain got his wish. But it’s unfair to put all the blame for Stellantis’ downright miserable 2024 on Tavares. His resignation could rally the troops, at least briefly, but sustaining any momentum is entirely dependent on who is chosen to replace him, and that may not happen for months. The new CEO must be tough, but he or she must also be a bridge-builder, able to implement a turnaround quickly, backed by some effective and convincing public relations. I’d name names if I could think of any: Roger Penske and Bob Lutz are too old and wouldn’t want the job anyway. Ford CEO Jim Farley? He’d be a provocative choice.
As usual, though, it boils down to product and price. What does Stellantis—for us, that means Chrysler, Dodge, Ram, Jeep, Maserati, Fiat and Alfa Romeo—have in the pipeline that will instill confidence in the dealer network, and generate a positive buzz among customers? The new Dodge Charger is punching above its weight in terms of favorable media coverage, but it’s just one model. The battery-electric Ram 1500 Ramcharger is impressive, but the truck is wading into an uncertain market. There’s a Dodge Dakota replacement finally coming, which is good news for dealers, at least.
Those of us who have been covering the automotive business for a while have seen Chrysler—after nearly four years, “Stellantis” still doesn’t roll off the tongue—go down for the count several times, sometimes saved by pulling a rabbit out of its hat. The Chrysler (and Dodge and Plymouth) minivans, introduced for 1984, left the competition absolutely flatfooted. The 1994 Dodge Ram pickup, the first with the “big rig” look in front, was a massive success. The Chrysler PT Cruiser, introduced for 2001, was a huge hit.
What do the above-mentioned successful products have in common? One thing: Each represented outside-the-box thinking, backed by the willingness to take chances. Well before the 1994 Dodge Ram debuted, Bob Lutz, then the head of Chrysler’s product development, showed the design to a small group of automotive journalists. The then-current Dodge Ram had been allowed to atrophy, while Ford and General Motors managed to keep their full-sized trucks reasonably fresh. With the radical 1994 Ram, “We have nothing to lose,” Lutz said then. The 1993 Dodge Ram sold 95,542 copies; the fresh-thinking 1994 model sold 232,092.
The Chrysler minivans, the 1994 Ram, the 2001 PT Cruiser were all justifiably regarded as the “next big thing.” Think about it: When was the last “next big thing?” The 2004 Toyota Prius, maybe? The resurgence of the pony cars, with the Ford Mustang, Chevrolet Camaro and Dodge Challenger? Stellantis needs to look deep into the ideas that have been presented by its employees and see if there’s something worth taking a chance on, something so different it could change the market landscape. Easier said than done, but the company has done it before. If there’s a time to take a few chances on the next big thing, it’s now.
Stellantis corporate seems surprised by the fact that the return of Fiat and Alfa have not invigorated Americans, and Chrysler is hanging on with a minivan, and some leftover 2023 Chrysler 300s, which is still using the (admittedly innovative) design of the 2005 model. What is the new CEO going to do with that information? Remember this statement, issued last August? “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. 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.” Huh.
Finally, there’s the matter of electricity. America has spoken: We are not yet ready to give up on gasoline. My press car this week is electric, and it needed charging last night. I live in the boondocks, and the only charging station reasonably nearby was, and this isn’t a surprise, having problems. The lone charger I could get to take my credit card pumped out electricity at 50kw, when I had hoped to use the 350kw charger. Meaning I sat there for a long time to get less of a charge than I wanted. I was not happy.
I saw electric cars come and go. A Lucid, a Hyundai towing a U-Haul, a couple of Chevrolets, a Volkswagen, two Ford Mustang Mach E’s. Nothing from Stellantis, which admittedly has been well behind the electric curve. Is that a good thing or a bad thing? Will electric vehicles come into their own? When? Five years? Ten? Longer? The lack of enthusiasm for electrics has caught most every manufacturer with their collective pants down, requiring a hasty recalibration of current and future products, a prime example being the timeframe for the twin-turbo Hurricane six-cylinder gasoline engine being moved up to fill in for questionable demand for the electric-only 2025 Charger. Stellantis has to guess right about how deep they want to dive into the electric market in the U.S. I don’t envy the people who have to make that decision.
Bottom line: To thrive, or possibly even survive as we know it, Stellantis must find a CEO who can energize the troops, make peace with suppliers, is forward-thinking enough to green-light an innovative product lineup, and can communicate a positive message.
Sounds simple. It isn’t. But the company’s future, if there is to be one, may hang on it.
“The lack of enthusiasm” for electrics is based on the price. The wealthiest consumers have been tapped out. And I know very few who want someone else’s used and likely abused e.v.. That’s a key issue with ev’s. Very, very few will touch a used one. Battery prices have fallen greatly but the new retail has not moved much. I believe the 90% that don’t own one yet are waiting for the $20-32k aerodynamic car. 400 mile range, about the size of a Fiero or Civic. And not a c.u.v. or s.u.v.. A very small truck would also sell very well. I think electric cars should have been introduced in small sizes and worked up. Not the reverse. The larger the vehicle the lesser the electric advantage. Disagree all you want! As for Stellantis, Where is the Dakota? Both gas and Electric? Should have been first out ahead of Charger. Chrysler- get back to a real “mini” minivan option. And do something about the 300. Anything would be nice. Geez!
Aside from offering interesting products, they could exert some influence over dealerships to make the buying and owning experience more agreeable. In my geography, and this may be true in other locations, dealerships replaced the drop in earnings from sales to the service department. $150+ for hourly shop labor is beyond the budget of many customers buying $30,000 vehicles. Dealerships are independent entities in the US but they are the customer-facing component of new car ownership. Improving the customer-dealership relationship could potentially improve the financial future for name-dejour Chrysler.
However, how many times have we heard that a company needs new products, that they cannot rely on nostalgia, and that the (highly compensated) executives failed to prepare for changes in supply of materials and labor, and market demand? These are fundamental challenges to almost all firms in a market-driven economy. If Stallantis cannot compete, it may be time for them to retire from their campaign for profits. Consumers will miss Ram trucks and domestically manufactured Jeeps but eventually they will be regarded in a manner similar to all the other deceased car companies.
Agree on the change to Ram. Am I the only one who remembers the ads from the old days? “Dodge builds tough trucks”. And they did and the slogan said it all. So much for retaining brand identity and legacy.
I believe Fiat had every intention of selling off Chrysler as soon as the ink was dry on the deal. Spinning the trucks off of Dodge and calling them Ram meant that a buyer could pick up the profitable arm of Dodge but not be stuck with the largely unprofitable passenger car division.
Just a guess
Bingo! That was exactly the thinking of the time, which shows how many people guessed wrong on Dodge. Personally, I wish they’d fold Ram trucks back into Dodges again.
Agree with most. We own three Dodge products: Jeep, Durango, and Ram. I went to look at new, and the lack of innovation and pricing was startling. I walked. And this is from a diehard Dodge Jeep fan. If they go EV, they die. If they don’t get a grip on fair pricing, they die. If they don’t give their engineers a chance to create something folks beg for, they die. Marketing has relied on brand loyalty and they’re sinking the ship. I’ve lost half of my Stellantis stock value. My bad for believing the accountants. weren’t running the show into the dirt. Not unlike Boenig. Crips, get a clue!.
Everyone seems to idolize Lutz. What did he do at Exide?
Who ever thought we’d see Ford & Dodge trucks losing engines at low miles… on a regular basis?
Engine parts count has gone higher and quality lower.
Keep listening to the climate idiots. Maybe a 25 speed trans will help to fix everything? Just ridiculous.
The buying public will decide.
In the current times the whole (world wide) auto industry has focused on technology and innovation to promote their products. If you’re looking for out of the box ideas for the industry, you’ll have to go back in the box per-say.
It’s pretty simple really, give the people what they want. Be able to order any vehicle from the factory, with what ever options they want. If you want all the tech, bells and whistles and can afford it, sure. If you want simplicity and power or just the minimal options and affordability, it should be possible. It also gives you a personal connection with the dealership, car and the manufacturer. A relationship would be formed and most likely stay with that manufacturer. Problem solved, that’s how I see it.
Actually, that is a very expensive way to manufacture cars. The Americans learned from the Japanese and Europeans… I call it the DX/LX/EX formula. Three content levels, three formulas at production. And in the case of a lot of models, one version of many of the sub components. Also, why do you think many of the “base” equipment has gone away. When given a choice, if 75% take the option, it is more cost effective to only build the one choice. This is the real reason air conditioning, power windows, and central locking are pretty much standard on everything. It is just way more cost effective to build them only one way.
The Charger is going to be burdened and dragged down by the electric one. A company that touts 0 percent financing before it even goes on sale knows that it is not a desirable product.
“As usual, though, it boils down to product and price.” This is the best quote from the article.
Not rocket science, simply drop the ev’s that no one wants, bring the I6 in the 2 and 4 door Charger immediately to market, then dig thru the Peugeot line up and bring the 208, 308, 508 and 508sw rebadged as Dodges.
Last but not least, drop the price and offer significant incentives to create momentum and bring customers back to us…..
PS, and a limited run of Charger 2 and 4 doors with a supercharged Hemi,
I miss Sergio.
Your comments regarding EV adoption are the reason folks are shying away from EVs. As a automotive journalist you get to test all sorts of cars but you can’t just dip your toe into the EV world, you must dive in. The fact you don’t have a charger at home leaves you at a disadvantage most EV consumers would not. I’ll cut you slack if you are a renter or apartment dweller, but if you own your own home, installing a basic level 2 charger will be transformative. Until then, your comments on EV experience is misleading at best.
The new Charger should come in 3 versions. Base model with 3.6L Pentastar that people can afford, I6 Turbo for ICE performance & the electric version. Chrysler has priced themselves out the market. My 2020 Grand Cherokee Limited cost me about $55K (Canadian) new. A 2024 with the same equipment (leather – not vinyl, Quadra Drive II etc.) would cost me 75K. I’ll drive my 2020 into the ground before I pay that.
Stellantis is a holding company, not a manufacturer of automobiles. Stellantis is a financial construct, lacking the distinct personality that would come with the either a unified purpose, or, a long heritage af making cars and trucks. What Stellantis is, is a company with too many orphaned and disparate brands, with little or no relation to each other and many with problems of their own.
I’m not so sure a puzzle this complicated can be adequately solved. What I see is a breakup of Stellantis with the CDJR brands being picked up by a private equity firm. Remember the short and painful reign of Cerberus and Bob Nardelli? Let’s hope it’s not as bad next time around.
Very valid point… I see it as they, for some reason, saw the success of BMW and Volkswagen Corp and somehow thought they could do the same thing… But what they missed is BMW and Volkswagen bought failed or failing brands and remade them in their image, then did their best to retain what the essence of those brands were. In the Stelantis family history is one example of that successfully happening… when Chrysler bought out AMC/Jeep and then revitalized Jeep. But that was decades ago. Maybe there is hope for them… first of all, they need to hire back talent in engineering here in the US. Then accept that (let the flames begin) the French and Italian platforms need to go. Lean on the German Opel talent you have if any are left. Then, develop platforms where the bulk of the sales will be. Small solid stuff in Europe, larger vehicles in the US. Then give the divisions the power to tweak those platforms to fit the brands. Let a Peugeot be French quirky, yet the Opel feels German solid and planted, while the Fiat has Italian flair… They can be the same car underneath but need to feel and look different. For example, the Dodge Hornet might be good (doubt it) but it looks and feels too much like the Alfa it is.
The number-one reason I will never buy a Chrysler product is that Chrysler Corp. can’t seem to survive without a parent company. Chrysler has been bought and sold by how many companies now? What happens when nobody wants them? Chrysler will go the way of Studebaker, and your Challenger will be an orphan.
If anyone buys Chrysler Corp., it will be for the same reason Chrysler bought AMC from Renault in 1987: because they wanted the Jeep brand.