From France, Italy and even the United States. The demonstrators who protested at the last Paris Motor Show came from both sides of the Atlantic, united by a common protest against the head of Stellantis, Carlos Tavaresthe embattled CEO whose automobile group defends itself against accusations of bad management.
The multinational group went from being the envy of manufacturers for its results (it had a record profit of more than 13,000 million euros in its first year of life) to being in a delicate situation. So delicate that she already speaks openly about separate from some of the brands of the group, including Maserati. For Tavares, the fault lies with the governments who have not supported the deployment of the electric car as they should, but for their employees, it all boils down to poor management by the CEO.
The limits of the Tavares method
In general, the Sales of the Stellantis group have been suffering a drop for months. In Europe, Stellantos has suffered a severe setback, with sales falling 27.1% year-on-year. These poor results are mainly due to the Citroën (-45.6%) and Fiat (-45.2%) brands, whose new models are eagerly awaited.
At the same time, at the end of September, the manufacturer lowered its profit margin forecasts for 2024 from 14.4% to between 5.5% and 7%. This was not only due to the difficulties of the North American market, as Carlos Tavares had stated. It is evident that the slow liquidation of dealer stock is also taking place in Europe, where the group’s market share fell to 17.2% in the first nine months. This represents a decline of 4.7 points compared to 2021, the year Stellantis was created.
Not only are sales falling, but, more seriously, Stellantis is restructuring its production, with paralyzed factories, such as the electric Fiat 500e and the Fiat Panda engines, underused plants, such as the Cassino in Italy (with a capacity of nearly 300,000 cars per year, production in the first quarter of 2024 amounted to only 15,900 units), and a relocation of its suppliers from Europe to Morocco, mainly.
The reason for this debacle, for Tavares, is the fault of the governments of the different states. The imposition of the electric car has not been accompanied by the necessary measures to stimulate its purchase, blame them of not offering adequate incentives to make the change from gasoline or diesel cars to electric ones.
At the same time, unions on both sides of the Atlantic blame him, the CEO, for mismanagement. They maintain they are paying the price for Stellantis’s short-term focus, long focused on maximizing profits to keep shareholders happy. A short-term attitude that has not really allowed us to have a plan for the future.
Although it is true that in most European countries, with some Scandinavian exceptions, incentive policies for the purchase of electric cars are between non-existent and very insufficient. These aid policies are more necessary than ever if you want to opt for the electric car, since it is not a natural transition.
And there is not a single market in the world where the growth of the electric car market share has been organic, and even less so in China and Norway, the champions of electrification. Even in China they are reaching the limits of incentives, with a notable growth in the vein of PHEV plug-in hybrid cars, therefore with an internal combustion engine, to the detriment of pure electric cars.
However, The fault cannot lie solely with the rulers. Yes, they have imposed the electric car without really helping its transition, but all manufacturers have faced this situation and not all of them are in the same situation as Stellantis. It could be argued that the Volkswagen Group It is also going through a delicate moment, negotiating the closure of several factories in Germany. Yes, but for diametrically opposite reasons.
Volkswagen was optimistic. While the Germans doubled their platforms between electric and gasoline-diesel, they wanted to make their own software and applied high prices hoping to sell huge volumes of cars in a short time, at Stellantis is missing cars.
It’s not that it lacks electric cars in its range, but that it simply lacks cars. And this is the most eloquent proof of a lack of investment. Except Peugeot, Opel y Maseratithere are many brands from Fiat to Chrysler passing through Citroën o Dodge that lack really new products.
Thus, employees of Stellantis and its suppliers are already seeing the limits of the Tavares methoda method that led it to have a double-digit profit margin, like BMW or Mercedes, but selling generalist cars.
This method, which consisted of drastically reduce costsselling at the same time increasingly expensive carsis coming up against the reality of the market. Buyers no longer follow him, especially in the United States, where the group obtained half of its profits. Cost cutting is still in place, especially with suppliers, but there is also a blatant lack of investment.
“Stellantis has not invested enough in the electric transition,” assures Maurizio Oreggiainternational coordinator of the Italian metalworkers union FIOM. He agrees that the Italian Government and the European Union are not doing enough to offer public support for electrification, the reinforcement of which is one of FIOM’s main demands.
But he also sees Stellantis’ own decisions as a key reason the automaker is falling behind. ”This transition is necessary given climate change (…). But We have known for many years that we have to do it”, he adds. Instead of reinvesting profits in research and development, in improving working conditions or in electrification, “they have distributed profits among shareholders, never among workers.”
Earlier this month, Stellantis announced that it had repurchased to shareholders shares worth 1.1 billion dollars since August. Tavares received a 56% pay increase last year. In April, Tavares defended his lavish compensation package by stating that it was simply part of the contract between him and the company, “just as there are contracts for football players and Formula 1 drivers.”
For now, Tavares continues to apply his method of extreme cost reduction, to the point of selling his test track in Arizona and canceling contracts with local suppliers, at the same time that he insists on offering his electric cars at a price that is too high for the current market.
On average, a Stellantis electric model is 10,000 euros more expensive than its gasoline equivalentas is the case, for example, of the Peugeot E-2008 and the Peugeot 2008. And often with lower performance than its rivals, especially in terms of autonomy. Prices that could even rise in gasoline models to avoid fines from the European Union for its low share of electric ones.
Meanwhile, their rivals They have felt pressure from the market, more than from the Chinese brands that still have relatively low sales in the electric segment, and They begin to propose models at lower prices and with a much more consistent autonomy, such as the Let’s EV3he Toyota bz4X, whose price has dropped almost 10,000 euros since its launch, or the Skoda Elroq.
Source: www.motorpasion.com
