STELLANTIS BLOWS UP REAL GOOD.
Editor's Note: This week, Peter goes in-depth on the travails of Stellantis’ CEO Carlos Tavares, as he confronts the company's U.S. operations, which have pirouetted into The Abyss. In "On The Table," we feature the 2025 Mercedes-Benz AMG GT 63 PRO 4MATIC+ "Motorsport Collectors Edition." And we preview the latest in EV VaporWare, this time from Lotus, called Theory 1. We also present a short advertising film from Mercedes-Benz featuring Bradley Cooper and the all-new G-Class EV. Then, we take another look at the all-new, fourth-generation Bentley Flying Spur. And in case you missed it, we have a superb thought piece from our Economics Correspondent, Tom Bartkiewicz. Our AE Song of the Week is "Something In The Air" by Thunderclap Newman. In "Fumes," we have the fourth installment of Peter's new series, "The Racing Machines." And in "The Line," we'll have results from the INDYCAR finale in Nashville, F1 from Azerbaijan, plus a rare appearance for NASCAR in these pages, but only because they're at The Glen. Onward. -WG
By Peter M. DeLorenzo
Detroit. A few weeks ago, I told you about how Stellantis’ CEO – Carlos Tavares – flew over here to have a come to Carlos – I mean Jesus – meeting with the company’s North American operatives to find out what the hell was going on with its U.S. operations, which have pirouetted into The Abyss.
Stellantis, which pushes Jeep, Ram Truck, Dodge and a rapidly fading from view Chrysler is experiencing a dismal downturn in the U.S. market, much of it self-inflicted. Just one example? Jeep’s U.S. sales have plummeted 34% from an all-time high of more than 973,000 SUVs sold in 2018 to fewer than 643,000 units in 2023. And remember, that’s Jeep, the “can’t-miss” darling – aka the Money Machine – that has lined the Stellantis overlords’ pockets for years.
Now, before I go any further, you must know that Tavares is another in the long line of “I’m A Genius, Just Ask Me” executives plying their trade in the auto business as of late. These executives pride themselves on being the smartest person in the room, and that if the assembled underlings would just bathe in the glow of their brilliance, they might be ushered into The Light too. Or something like that.
Except reality suggest that’s just not how it works.
Instead, these executives have a terrible habit of parachuting into situations, imparting their words of wisdom that the underlings are expected to follow to the letter, and then helicoptering out to the next “thing” of the moment – only to return a few weeks later fuming at the direction of the resulting work and having to be “gently reminded” more often than not that this was exactly what he or she asked for. (The current Ford CEO is an expert practitioner of this unmitigated bullshit, by the way.)
In Tavares’ case, it’s even worse than that. He is truly an absentee CEO (who happens to be spending a lot of time in Detroit at the moment -WG), who has been overseeing Stellantis’ U.S. operations from afar, as in, from across The Pond. He and his fellow Stellantis overseers were quite adept at sucking up the profits generated by Jeep (and Ram and the Dodge muscle cars), but while they were counting the profits and luxuriating in huge salaries and bonuses – especially for Tavares, of course – they missed that the entire U.S. operation was beginning to augur into the ground.
The situation is so bad that the Stellantis’ U.S. national dealer council ripped Tavares a new one in a blistering open letter sent on September 10th. In it, the dealers used blunt language – which I found to be highly amusing and on target, by the way, and which, as reported by Automotive News in excerpts, unfolded like this: “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. A disaster not just for us, but for everyone involved — and now that disaster has arrived.”
Ouch, baby.
This missive was the culmination of several other communiques to Tavares and his executive operatives, each one sounding more ominous than the one before. And the Stellantis response? According to AN, Stellantis PR minions said it took exception to the letter and that it doesn’t believe public personal attacks are the most effective way to solve problems. Oh really? Yes, of course that’s what they would say. After all, Carlos couldn’t possibly be responsible for royally screwing things up, could he?
But then again, Tavares’ absentee landlord approach to management isn’t solely responsible for the decline in Stellantis’ U.S. fortunes. As I’ve pointed out repeatedly over the last 24 months, a succession of Jeep executive leaders actually started to believe their press clippings and the “can’t-miss” upward trajectory of the brand, which translated into some of the most egregious pricing in the industry. All you have to do is look at the current prices of the Wranglers that you find on dealer lots, which run between $60,000 - $70,000 on average, and up. For a Wrangler. (And that’s not even counting the Wrangler Rubicon 392, which stickers for around $93,000! -WG)
Trying to emulate those Meisters of Greed at Porsche was a wrong-headed strategy, but that’s exactly what Jeep operatives were attempting to do. First of all, Porsche operatives have been honing their craft for decades, to the point that no other automaker in the industry extracts more ca$h-ola from their faithful than Porsche. That’s fine for Porsche, because they have enough buyers who just can’t wait to be the Biggest Tools in The Shed – witness the current feeding frenzy for the 911 Dakar to see what rampant stupidity looks like.
But again, that’s Porsche. Which is a far cry from Jeep. Any Jeep. But Jeep operatives got stars in their eyes and got hit with the giant Greed Stick, while figuring that the sales good times would never end, so they kept relentlessly jacking up Jeep prices over the last three years. And guess what? They ignored one of the time-honored axioms in this business, which goes something like this: The good times always come to an end.
So, it’s no wonder that the Jeep brand is in serious trouble in this market. And now Tavares and U.S. Stellantis operatives are crafting a new strategy in a desperate attempt at jump-starting Jeep fortunes. Good luck with that.
But Stellantis troubles don’t begin and end with Jeep. Stellantis operatives grossly miscalculated the “Grand Transition” to EVs, and the new Dodge Charger EV has become the latest Answer to the Question that Absolutely No One is Asking. And in the midst of all of this turmoil, Stellantis’ U.S. operation has basically abandoned affordability, with a product lineup lacking few options for consumers who don’t want to spend $50,000 and up. (And as much as they try to flog the Dodge Hornet, it's not bearly enough to right things.)
And finally, Stellantis dealers have to take some of the blame too. Dealers are notorious kings of the short-term thinkers, and despite their protestations otherwise, they still live, make that thrive, in a 30-day sales environment. They knew damn well that Jeep prices were out of control, but they were too greedy to raise their concerns earlier, because they were counting their profits right along with the Stellantis overlords, with stars in their eyes to boot.
So, Tavares and his Stellantis operatives on both sides of The Pond are in the throes of a revised strategy for its U.S. operations that consists of furious backpedaling. Which means serious price rollbacks and huge incentives to move the inventory piling up on dealer lots across the country. But that’s just the beginning, because it doesn’t account for the lack of new products on deck, at least new products that don’t have the initials “EV” attached.
None of this is a surprise to anyone who has watched what was going on out in Auburn Hills over the last several years, because the reality is that no auto company’s group of executives has done less with more than the stumblebums out in Auburn Hills. The car company formerly known as the “Can’t-Miss” money-printing machine is suddenly reeling and flailing. It’s a harsh indictment of everything Tavares & Co. has done up to now, but the assessment is Dead. Solid. Perfect.
Stellantis is blowing up real good – right before our eyes.
And that’s the High-Octane Truth for this week.
Editor's Note: You can access previous issues of AE by clicking on "Next 1 Entries" below. - WG