Stellantis CEO Carlos Tavares will visit Detroit this week, where he will seek to develop a strategy to address the difficulties of his company’s North American brands and reassure employees and investors. Tavares’ visit was scheduled following shareholders’ complaints about the financial results for the first half of 2024 and the consequent issues with the UAW union, which harshly criticized the Portuguese manager’s leadership.
Stellantis, Carlos Tavares flies to the United States to study a new strategy
Although Tavares typically visits operational sites in North America every four to six weeks, his visit this week, during the summer break, is intended to send a clear signal. The CEO’s intention is to demonstrate that he is personally addressing the situation. “North American operations are substantially financing the rest of the group,” Tavares stated.
The automotive Group’s CEO described Stellantis’ first-half results as “humiliating,” stating that the North American business of the automaker born in 2021 from the merger of Fiat Chrysler and PSA has suffered from a mix of high vehicle inventories, production problems, and a lack of “sophistication” in how it approached the local market. As a result, Stellantis shares have plummeted by nearly 50% from their March highs.
During this week’s visit to the Auburn Hills, Michigan offices, Carlos Tavares will initially meet with high-level executives and then develop a strategy by the end of the week to address the situation, according to a source. In the first half of the year, Stellantis’ operating income fell by 40%, mainly due to difficulties in North America, which represents the heart of the company’s profit. Vehicle sales of Stellantis’ main brands, such as Ram and Jeep, have decreased by over 33% compared to the first half of 2019, according to Cox Automotive data. Stellantis has thus been forced to cut costs, announcing new layoffs in the United States.
Up to 2,450 workers at the Warren Truck assembly plant near Detroit will be laid off following the discontinuation of Ram 1500 Classic production. At the end of July, the company also offered voluntary retirement incentive packages to employees in the United States. Tavares also highlighted inefficiencies in two U.S. plants, without specifying which ones. In July, he told reporters that the production pace at the Sterling Heights assembly plant in Michigan was unsatisfactory. Tavares’ visit comes at a time when concern is growing among some investors and unionized workers regarding difficulties in North America.