MILAN/DETROIT (Reuters) – Led by Chairman John Elkann, Stellantis, owner of 14 brands including Fiat, Jeep and Ram, is moving quickly to dismantle the legacy of its former chief executive and repair relationships with dealers, industry partners, governments and workers.
Carlos Tavares abruptly resigned on Dec. 1, nearly 18 months before his contract was set to expire, as a rift widened between the board of directors and major shareholders of the world’s fourth-largest automaker.
While it searches for a new CEO, Stellantis is led by an interim executive committee, chaired by Elkann.
Having warned about profits in late September and facing bloated inventory, Stellantis cannot afford to be left adrift under its temporary leadership.
Elkann, 48, is a descendant of the Agnelli family that founded Italian automaker Fiat more than a century ago. He also chairs Ferrari and heads the Exor Agnelli family holding company.
The new approach will be put to the test on Tuesday, when representatives from the automaker meet with Italian Industry Minister Adolfo Urso and local unions to try to agree on a long-term plan for production in Italy.
The company, the country’s only major automaker, can commit to expanding production and protecting jobs in exchange for better manufacturing conditions and government support for the industry’s electric transition, easing tensions with Rome.
A Stellantis source, who spoke on condition of anonymity, said the time was right to sign a deal.
MEET THE LOBBY GROUP
Less than a week after the chief executive resigned, Stellantis said it would join European automotive lobby group ACEA. He left in early 2023 at the decision of Tavares, who opted for an independent lobbying strategy without consulting the board, according to a second source.
The automaker plans to align itself with the group’s proposals, Stellantis’ European chief Jean-Philippe Imparato said last week.
Tavares had opposed a call by ACEA for relief on the interim targets of the European Union’s carbon reduction targets, under which carmakers risk multimillion-dollar fines.
Their position was not supported by Stellantis’ European distributor associations, which supported ACEA’s proposal.
But at a meeting of Stellantis’ European retailers, held in Amsterdam days after Tavares’ resignation, Imparato was the chief guest and the atmosphere was relaxed.
“The cooperation with Stellantis… is strong and we are confident that we will be able to meet future challenges with our partner,” the distributors said in a statement.
Alberto Di Tanno, president of Italian dealer group Intergea, said it was too early to see concrete changes, but he was confident.
“It seems that the company wants to present itself as less centralized and give more autonomy to its national structures, also in relations with distributors,” he said.
REPAIR RELATIONSHIPS
Tavares, an industry veteran who had led Stellantis since its creation in 2021 through the merger of PSA and Fiat-Chrysler, had been praised for his rising operating margins.
However, retailers on both sides of the Atlantic complained that rising prices for their mass-market brands ultimately caused them to lose the support of inflation-hit customers.
This month, Stellantis quickly rehired retired executive Timothy Kuniskis to run Ram, one of its biggest brands.
Industry analysts have interpreted the decision as a step to improve relations with dealers in the US, the group’s profit center, and reverse Ram’s US sales, which fell 24% this year. year at the end of the third quarter.
Kevin Farrish, head of Stellantis’ dealer council, said Elkann met with its executive board in the United States in early December to discuss how the automaker could repair its relationship with dealers.
Elkann said Antonio Filosa, named head of North American operations in October, would have the authority to respond to market conditions, Farrish said.
“It meant a lot to us,” he said in a message. “We have plenty of opportunities to fix what Mr. Tavares damaged.”
Santosh Viswanathan, owner of a Stellantis dealership in Delaware, said Elkann’s early actions were promising, although there was a lot of work to be done.
“The distribution body, which is their distribution channel, has been left in tatters,” Viswanathan said.
“Right now, difficult times call for drastic measures.”
THE STABLE INFLUENCE OF ELKANN
After falling to its lowest level since July 2022 on December 2, following the news of Tavares’ resignation, Stellantis shares have recovered more than 18%, having fallen more than 40% since the beginning of the year .
Andrea Scauri, a fund manager at Switzerland-based Lemanik, which rebuilt a small stake in Stellantis last week, said the entire auto industry will benefit from a softer EU approach to carbon emissions rules, including possible fines on the intermediate objectives for 2025.
“Tavares denied that this was a problem,” Scauri said.
“Recognizing that there may be risks and having more constructive relationships with politics, at national and EU level, should help Stellantis.”
A third source, who like the others spoke on condition of anonymity because he was not authorized to speak publicly about these issues, said that Elkann devoted most of his time to Stellantis.
The source also said that Elkann had opted for an interim executive team, rather than taking on the role of interim CEO as he had done when Ferrari was left without a CEO at the end of 2020.
“His idea was to have a more collegial management during this phase, with greater focus on senior executives, their role and their skills, compared to the previous one-man style under Tavares,” the source said.
(Reporting by Giulio Piovaccari in Milan and Nora Eckert in Detroit; Additional reporting by Gilles Guillaume in Paris and Alessandro Parodi in Gdansk; Editing by Keith Weir and Barbara Lewis)
