Running one of the largest automakers in the world is a challenge.
That challenge has been especially hard for CEO Carlos Tavares of Stellantis (STLA) , the parent company of 14 well-known auto brands, including Fiat, Alfa Romeo, and Maserati, as well as Detroit mainstays like Jeep, Chrysler, Dodge, and Ram Trucks.
The summer of 2024 was an eventful one for the company. In July, the company reported dismal first-half 2024 results that fell short of expectations, blaming a "challenging industry context" and "operational issues" centered around one of its biggest markets: North America.
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Since then, the company has attempted to cushion the fall by introducing cost-cutting measures, including voluntary buyouts for white-collar employees and layoffs of more than 2,450 assembly-line workers.
Additionally, the automaker rejected a desperate bid from a Chrysler family heir to take back the Jeep, Dodge, Chrysler, and Ram brands and has been attacked by dealers and the UAW for failing to meet their respective goals.
But amidst the madness, the Stellantis CEO is doubling down on a controversial statement he made earlier this year that may question the health of its 14 brands.
Trimming down the Stellantis 'beast'
In remarks to the press during the Paris Motor Show this week, the Stellantis CEO reiterated the sentiment he expressed earlier this summer, putting the 14 brands under the Stellantis umbrella on notice and providing a timeline for their evaluation to continue.
“We will review each (Stellantis) brand's performance at about two-thirds of the way through the Dare Forward 2030 plan, so you could expect decisions in two to three years,” Tavares said.
This statement harkens back to a statement made in July, in which he warned the Stellantis brands that may be acting as dead weight in light of their diminished sales and financial performance.
"If they don't make money, we'll shut them down," Tavares threatened during Stellantis's first-half 2024 earnings call. "We cannot afford to have brands that do not make money."
Granted, Tavares is set to retire when his contract ends in 2026, and already, Stellantis is searching for his successor. With this timeline in mind, his successor will be the person pushing the decision buttons of the automaker's 14 brands.
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Nonetheless, this sentiment is a far departure from a promise he initially made at the Financial Times' Future of the Car Summit in 2021. There, the head of the conglomerate of 14 brands said that each brand will have ten years to fully show its worth before it faces a discontinuation of any kind.
"We're giving each a chance, giving each a time window of 10 years and giving funding for 10 years to do a core model strategy," Tavares said in 2021. "Each brand is given the chance to do something different and appeal to customers."
However, as times have changed and Stellantis's luck ran short, Tavares pulled back on his initial statement and issued the warning, leading to some speculation about which brands would be axed — a conversation Stellantis shot down quickly.
"Stellantis reaffirms its commitment to its entire portfolio of 14 iconic brands and recalls that each of them has a 10-year horizon to build a profitable and sustainable business, while recognizing that market volatility and temporary situations may cause fluctuations," Stellantis said in response to rumored developments about Maserati.
Related: Massive Jeep recall is only the latest headache for Stellantis
Stellantis' current basket of troubles
Carlos Tavares' comments come as Stellantis already faces many issues in North America.
More than 154,000 Jeep's popular Wrangler and Grand Cherokee 4xe plug-in hybrids in the United States have been recalled due to a scary fire risk originating from its lithium-ion batteries.
Already, Stellantis faces massive inventory problems that it is tackling by implementing an "aggressive incentive program" of discounts and incentives at its dealerships. However, even the models it does manage to sell face critical issues that may discourage buyers away from Stellantis' massive portfolio of brands.
In a statement issued on October 16, Stellantis acknowledged and issued a recall of 21,069 total units of the Dodge Hornet and Alfa Romeo Tonale crossover SUVs after receiving reports that the brake pedal could collapse in normal driving situations.
The recall affecting 17,047 Dodges and 4,022 Alfas comes as Stellantis was made aware of 15 instances in vehicles worldwide, including one vehicle involved in an accident but no injuries.
In NHTSA filings, Stellantis advises owners of these vehicles to use the electronic parking brake in addition to the automatic emergency braking to stop their vehicles if they experience this issue.
Stellantis N.V., which trades on the New York Stock Exchange as STLA, fell 0.54% from the opening bell, trading at $12.96 per share at the time of writing.
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