Multinational automaker Stellantis (STLA) , the parent company of well-known American car brands Jeep, Dodge, Chrysler and Ram, has been going through the motions since it reported disappointing first-half earnings results in late July 2024.
During the earnings call, CEO Carlos Tavares blamed a "challenging industry context" and its own "operational issues" for the challenges it has been facing.
"We have significant work to do, especially in North America, to maximize our long-term potential," Tavares said.
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Since the report's publication, the company has aggressively implemented 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.
Additionally, the automaker also rejected a desperate bid from a Chrysler family heir to take back the Jeep, Dodge, Chrysler, and Ram brands.
Stellantis dealers write back
As the people bearing the brunt of the bad situation from the ground level, leaders representing the U.S. dealer network of Stellantis brands chastised CEO Carlos Tavares in an open letter directed at him.
In the letter dated September 10, the dealers put Tavares front and center for the “rapid degradation” of brands like Dodge, Ram, and Jeep, urging him to spend more to help clear excess and old inventory off of their lots.
“For over two years now, the U.S. Stellantis National Dealer Council has been sounding this alarm to your US executive team, warning them that the course you had set for Stellantis was going to be a disaster in the long run,” the dealers wrote in their letter.
“A disaster not just for us, but for everyone involved — and now that disaster has arrived.”
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Additionally, the dealers accused Tavares of prioritizing short-term decisions that boosted profits, allowing him to take home more than $40 million in profits in 2023.
The dealers note that such moves have been made at the expense of shrinking Stellantis's market share and hurting its American marques—Jeep, Ram, Dodge, and Chrysler.
"The market share of your brands has been slashed nearly in half, Stellantis stock price is tumbling, plants are closing, layoffs are rampant, and key executives fleeing the company," the dealers wrote. "Investor lawsuits, supplier lawsuits, strikes–the fallout is mounting. Your own distribution network, your dealer body, has been left in an anemic and diminished state."
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Stellantis writes back
In a response to the letter from the Stellantis National Dealer Council, Stellantis defended its efforts to help boost sales.
It mentioned that in August 2024, it developed an "action plan" with its dealers "that has already shown results."
According to the automaker, a new strategy it developed with dealers resulted in August 2024 sales being up 21% over July, its market share increasing by 0.7 points, and dealer inventory reduced "by approximately 10% in total."
Additionally, the automaker reprimanded the National Dealer Council, noting that such a letter was not how they do business.
"At Stellantis, we don’t believe that public personal attacks, such as the one in the open letter from the NDC president against our CEO, are the most effective way to solve problems," Stellantis said in a statement.
"We have started a path that will prove successful. We will continue to work with our dealers to avoid any public disputes that will delay our ability to deliver results."
Stellantis N.V., which trades on the New York Stock Exchange as STLA, is down 1.58% from the opening bell, trading at $14.97 at the time of writing.
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