Yields fall sharply in the first half of 2024
The Franco-Italian-American manufacturer indicated at the end of September that it had launched a succession process for its general director, whose mandate was to end at the beginning of 2026.
“A little over a year before the end of the five-year contract signed in January 2021, it is wholly normal for a board of directors to look at the matter with the necessary perspective given the importance of the position, without this proposal. future discussion,” the group then indicated in a brief press release sent to AFP.
Stellantis, which produces chrysler and also Citroën, Fiat, Jeep, Dodge, Lancia, Opel, Peugeot, Ram and Vauxhall, published in July a sharp drop in first half results, particularly disabled by an 18% drop in sales in North America, the group’s cash machine.
Salary of 36.5 million euros in 2023
Carlos Tavares himself admitted at the end of July that Stellantis was going through a “very turbulent period” and that he expected to recover in the second half of the year. The car enthusiast made a name for himself by turning around the PSA group (Peugeot-Citroën) from 2014, by cutting costs.
And the promise of the completed megamer between PSA and FCA (Fiat-Chrysler) seemed to be fulfilled: since the creation of this group of fourteen brands in 2021, Stellantis has set net profit records. A shortage of electronic chips, which limited the production of the cars, helped the group to sell them at the highest prices. But the car market has since stabilized at a very low level.
Stellantis coughed up the first half of 2024, with net profit halved, before it sneezed in the face of more serious than expected difficulties in North America.
Managing director Carlos Tavares was forced to abandon his “double-digit” operating margin target for the year, which put him well ahead of his rivals, and justified his planned salary of 36.5 million euros for 2023, however. , the general manager declared a few weeks ago that the company’s strategy had “created itself”.
If these new objectives are a “serious warning”, “it is not Stellantis that is (in trouble), isolated in the middle of the automotive industry (…), it is Stellantis, Volkswagen, BMW, Mercedes, and probably not. finished,” explained Carlos Tavares.
Market stabilization
The mandatory electrification of the car complicates the prospects of these manufacturers in an already gloomy market. Some have called for a downward revision of CO2 emission standards, which will force them to sell more electric vehicles at the start of 2025.
Carlos Tavares saw things differently,after competing for a long time about a “dogmatic” transition towards 100% electric in 2035. “Everyone has known the rules for a long time, everyone had time one prepares, and so now we are racing,” he said in September in an interview with AFP.
Between two planes, this vintage car enthusiast visits historic racetracks about ten times a year. The leader said he wanted to “contribute to solving the problem” of global warming, for his four grandchildren, while protecting the “freedom of movement” of citizens in their cars.
And for them to be cheaper, we always have to produce cheaper, putting pressure on both employees and suppliers.
“Don’t be afraid to be unpopular”
Employees are regularly encouraged to leave, depending on job cuts plans. At the same time, the group is relying more on low-cost countries, such as Brazil, Morocco and Turkey, to manufacture its cars.
Many unions criticized their methods but “the management of this company is not afraid that thay will not be popular,” replied Carlos Tavares. After attending French high school in Lisbon, this central player launched his career at Renault, before leaving his position as number two in 2013, to the chagrin of the all-powerful CEO of the time, Carlos Ghosn.
In 2014,he took charge of the struggling PSA group,a victim of the crisis caused by the collapse of the European market for new cars. PSA was narrowly saved from bankruptcy when the French state and Chinese manufacturer Dongfeng became its capital.
As for his planned retirement for 2026? “If you ask my wife, she’ll say it’s a necessity on her part. I am a good husband,” said Mr. tavares, who lives between France and portugal, a few weeks ago, where he has a vineyard and a garage for vintage cars.
How can Stellantis effectively adapt to the rapid changes in the electric vehicle market?
Interview: The Future of Stellantis and Leadership Challenges Ahead
Editor: Welcome to Time.news! Today, I’m joined by dr. Elena Moreno, an expert in automotive industry dynamics and corporate governance. Dr. Moreno, thank you for being here.
Dr. Moreno: Thank you for having me! it’s a pleasure to discuss such pertinent developments in the automotive sector.
Editor: Let’s dive right in. We recently learned that Stellantis has initiated a succession process for its general director, Carlos Tavares, ahead of his planned departure in 2026. Why do you think the board made this decision so early?
Dr. Moreno: It’s quite strategic,actually. A year and a half before the end of a general director’s term, it’s prudent for a board to begin contemplating the future leadership of the company. Given the importance of the role, especially in a company as large and complex as Stellantis, it’s essential to ensure a smooth transition that can maintain stability and momentum.
Editor: That makes sense. Speaking of stability, stellantis reported a steep decline in thier first-half results this year, especially with an 18% drop in North American sales—what do you think contributed to this downturn?
Dr. Moreno: The decline in North American sales can be attributed to several factors, including intensified competition, supply chain challenges, and shifts in consumer preferences.The electric vehicle market is evolving rapidly, and companies that don’t adapt quickly enough can find themselves left behind. Stellantis has a diverse portfolio, but focusing on innovation and sustainability is crucial now more than ever.
Editor: Indeed,innovation is key. Speaking of which, Tavares’s salary was reported to be 36.5 million euros in 2023. How does executive compensation impact a company’s culture and public perception, especially in times of financial downturn?
Dr. Moreno: Executive compensation can be a double-edged sword. On one hand, high salaries can attract top talent essential for steering the company through turbulent times. Conversely,during periods of financial struggle,such compensation can be a contentious issue among stakeholders,potentially leading to questions about equity and corporate governance. Transparency and alignment with company performance are crucial. The perception of fairness can influence employee morale and public opinion considerably.
Editor: Very insightful. With all these challenges, what should be Stellantis’s priorities moving forward to regain its footing in the market?
Dr.Moreno: Stellantis should focus on a multi-faceted approach. Firstly, investing in electric vehicles and sustainable technologies is vital, as consumer demands shift towards greener options. Secondly,improving operational efficiency and enhancing their supply chain resilience could mitigate some of the challenges they’ve faced. Lastly, cultivating a strong brand relationship with customers through effective marketing and service improvements will help rebuild trust and drive sales.
editor: Those are some tangible steps for the company.Before we wrap up, Dr. Moreno, how do you see the automotive industry evolving in the coming years, especially in light of economic pressures?
Dr. Moreno: The automotive industry is at a crossroads. We’re witnessing a seismic shift toward electrification, automation, and digitalization. Companies will need to innovate not just in product offerings but also in their business models. Economic pressures may accelerate consolidation within the industry as companies seek to pool resources and talents for research and development. Adapting to these changes will differentiate the leaders from the laggards.
Editor: Thank you,Dr. Moreno, for sharing your insights with us today. It truly seems that Stellantis has a critically important journey ahead, and the choices made now will undoubtedly shape its future.
Dr.Moreno: Thank you for having me! It’s an exciting time in the industry, and I’m looking forward to seeing how these developments unfold.
Editor: That’s all for today’s discussion. Stay tuned to time.news for more updates on the automotive industry and beyond!