Executive View: Stellantis woes and why “wartime CEOs” are currently the best fit

It’s no secret the automotive industry has hit a few potholes in 2024. Flattened consumer spending, persistently high interest rates and supply chain disruptions stemming from geopolitical tensions have forced auto manufacturers (both budget and luxury) to negatively adjust their forecasts, writes Adrian Stalham of Sullivan & Stanley

Aston Martin’s production volume for 2024 has fallen to 6,000, representing a 14% decline from its initial guidance. Meanwhile, plummeting sales in China have caused VW’s profits to fall by 60%.

Although there are bright spots - such as global electric vehicle (EV) sales being up 22% in H1 2024, spurred by increased efforts to combat climate change - it’s hard to look beyond the shadows. 

Stellantis is the latest company to lose its way. Born through the merger of Fiat Chrysler Automobiles (FCA) and PSA Group (Peugeot, Citroën, DS, and Opel), Stellantis is a shining example of how an ambitious project to combine diverse brands, products and markets can quickly veer off course. 

Whether it’s Stellantis’ share price falling by 45% this year, or its Q3 YoY revenue down 27%, it’s clear that there is a lot of work to be done. But a change in leadership could be the jump start it needs to reassert itself in an increasingly competitive market. 

What started the tailspin? 

Much of Stellantis’ historic success can be attributed to its strong roster of truck brands, with Jeep, Dodge, Chrysler and Ram the standout names. Unfortunately, its position in this space has faltered in recent times. 

Part of this can be attributed to recurring reliability and quality issues. Not only have 200,000 vehicles been recalled due to faulty electronic stability systems.

Carlos Tavares, CEO of Stellantis, has admitted that many newly built Ram trucks require repairs before reaching dealerships - making it hard to instil confidence in consumers and shareholders alike. 

The fact that Stellantis’ main competitors are making inroads in the truck market hardly helps matters. Both Ford and General Motors have updated their model lineups, while there are an increasing number of Chinese rivals to contend with. 

However, in my opinion, it’s the sense that Tavares has lost the dressing room which is most worrying. It feels like Stellantis’ CEO is battling on all fronts while winning on none, which makes his decision to step down from the role in 2026 unsurprising. 

Disputes with the United Auto Workers (UAW) union surrounding Stellantis’ delayed investment and alleged contract breaches is threatening to bubble over into strike action.

There’s sustained criticism from Italian government officials about a lack of investment (again). And flawed pricing strategies have left US dealerships with excess inventory without the hope of shifting the stock. 

These aren’t isolated incidents. These are a pattern of mismanagement that, if left unchallenged, threaten Stellantis’ future. 

Someone new in the driver’s seat

From my perspective, Tavares rode the rebound wave of growth from the pandemic but didn't seem to have the toolset to navigate tricky market conditions. That being said, he’s still able to impart some words of wisdom. 

Case-in-point, he recently threatened to cut underperforming brands adrift. Although rationalising the brand portfolio may be an emotional journey, he’s right - Stellantis isn’t in a position to continue supporting brands that aren’t financially performing.

This course of action would enable the business to clarify which aspects of its offering will represent Stellantis across the wider automotive market. 

From a personnel standpoint, Tavares’ departure would pave the way for a rare breed of leader - the “wartime CEO”, ready to take the reins when the going gets tough.

This unique individual can anticipate future market dynamics, make bold strategic calls that catch the competition unawares - and most importantly, unify a fractured leadership team. 

The latter point cannot be understated. Companies’ ability to navigate winding roads hinges on ‘telepathic’ alignment and integrity at board level - something Stellantis is severely lacking.

The unexpected departures of director Andrea Agnelli in January 2023 and non-executive director Kevin Scott in February 2024 were far from ideal, contributing to wider disarray. 

The “wartime CEO” should also bring an unwavering attention to detail, upholding the highest standards of quality.

Anyone looking at how to make a prestige u-turn need only look to Land Rover for guidance. The British brand, previously renowned for its unreliability, has become the pinnacle of engineering.

What’s more, the tools needed to make these changes are well-documented, and more cost-effective compared to the costs - both financially and reputation - of recalls. 

Don’t just stay the course

It’s hard to find cause to root for Stellantis at the moment. From an outsider’s point of view, the situation looks a little chaotic. And while the combination of growing environmental pressures - and subsequent shift to EV - and the imminent macro-economic upheaval from technological advancements are cause for concern, these pale in significance to the company’s self-inflicted problems. 

Stellantis, and by extension Tavares, are guilty of making the same mistakes time and again. Failure to resolve this will see potential investors stay away, as well as brain drain setting in amongst employees.

Appointing a new CEO that has the confidence to implement a new strategic direction - even if this means leaving certain brands in the dust) could be the catalyst needed to deliver long-term stability. 

Adrian Stalham is chief change officer, Sullivan & Stanley