MILAN/DETROIT (Reuters) – Under the leadership of Chairman John Elkann, Stellantis, owner of 14 brands including Fiat, Jeep and Ram, is moving quickly to dismantle the legacy of its former CEO and damage relationships with dealers, industry partners, governments and employees to restore.
Carlos Tavares resigned abruptly on December 1, almost 18 months before his contract expired, as the rift between the board and key shareholders of the world’s fourth-largest automaker widened.
While it searches for a new CEO, Stellantis is led by an interim executive committee chaired by Elkann.
After warning about profits in late September and facing an inflated stock, Stellantis cannot afford to stay afloat under his interim leadership.
Elkann, 48, is the scion of the Agnelli family who founded Italian carmaker Fiat more than a century ago. He is also chairman of Ferrari and heads the Exor Agnelli family holding company.
The new approach will be tested on Tuesday, when the carmaker’s representatives meet 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 – could promise to expand production and protect jobs in return for better production conditions and government support for the industry’s electric transition, easing tensions with Rome.
A source at Stellantis said, on condition of anonymity, that now is the right time to sign a deal.
Less than a week after its CEO left, Stellantis said it would rejoin European auto lobby group ACEA. He left at the beginning of 2023 based on a decision by Tavares, who, according to a second source, opted for an independent lobbying strategy without consulting the board.
The automaker plans to join the group’s proposals, Jean-Philippe Imparato, head of Stellantis Europe, said last week.
Tavares had opposed a call from the ACEA for a relaxation of the interim targets of the European Union’s CO2 reduction targets, with carmakers facing multi-billion fines.
His position was not supported by European Stellantis dealer associations, which supported the ACEA proposal.
But at a meeting of Stellantis European retailers, held in Amsterdam a few days after Tavares’ resignation, Imparato was the chief guest and the mood was relaxed.
“The partnership with Stellantis… is strong and we are confident that together with our partner we can meet future challenges,” the dealers said in a statement.
Alberto Di Tanno, the chairman of Italian dealer group Intergea, said it was too early to see concrete changes but that he was confident.
“It seems that the company wants to present itself as less centralized and give more autonomy to its country structures, including in relations with dealers,” he said.
REPAIR RELATIONSHIPS
Tavares, an industry veteran who had led Stellantis since its founding in 2021 through the merger of PSA and Fiat-Chrysler, was praised for his rising operating margins.
However, dealers on both sides of the Atlantic complained that rising prices for mass-market brands ultimately lost the support of inflation-hit customers.
Stellantis this month quickly rehired retired executive Timothy Kuniskis to lead Ram, one of its flagship brands.
Industry analysts have interpreted the decision as a move to improve relations with dealers in the US, the group’s profit center, and reverse Ram’s US sales, which fell 24% at the end of the third quarter this year .
Stellantis dealer council leader Kevin Farrish said Elkann met with their executives in the U.S. 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 numerous options to repair what was done to Mr. Tavares.”
Santosh Viswanathan, owner of a Stellantis dealership in Delaware, said Elkann’s initial moves were promising, although there was still a lot of work to be done.
“The dealer organization, your distribution channel, is in tatters,” Viswanathan said.
“Right now, drastic times require drastic measures.”
After falling to their lowest level since July 2022 on December 2 following news of Tavares’ resignation, Stellantis shares have recovered more than 18% after falling more than 40% since the start of the year .
Andrea Scauri, a Switzerland-based fund manager at Lemanik, who rebuilt a small stake in Stellantis last week, said the entire car industry will benefit from a softer EU approach to CO2 emissions rules, including possible fines for interim targets before 2025.
“Tavares denied this was a problem,” Scauri said.
“Recognizing that there may be risks and having more constructive relationships with politicians, at national and EU level, should help Stellantis.”
A third source, who like the others spoke on condition of anonymity because they were not authorized to speak publicly on the issues, said Elkann spent most of his time on Stellantis.
The source also said that Elkann had opted for an interim management team, rather than taking on the position of interim CEO as he had done when Ferrari was without a CEO at the end of 2020.
“His idea was to have a more collegial management during this phase, with more attention to top managers, their roles 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)
