Tensions Rise At Stellantis After Dealer Network Pens Open Letter To CEO Over “Damaging Brands”

Tensions are rising at automaker Stellantis, where dealers recently penned a letter to Chief Executive Officer Carlos Tavares, accusing him of the “rapid degradation” of the automaker’s brands, according to a new report from Bloomberg.

US dealer network leaders said Tavares has engaged in “short-term decision making” that boosted last year’s profits and increased his compensation but hurt the Jeep, Ram, Dodge, and Chrysler brands.

The Bloomberg report notes that since U.S. sales plunged, cutting first-half earnings nearly in half, Tavares has cut jobs and reduced capacity at American factories. Stellantis has also tried to clear vehicle inventories by cutting prices and reintroducing incentives, but dealers argue these measures are insufficient to protect the company’s profit margins.

The US Stellantis National Dealer Council said in a letter: “For over two years now, the US 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.”

Stellantis, however, argues its plans have led to sales and market gains. They responded: “This is the result of working together with our dealer network and we want to thank them for their constant support and engagement.”

“We meet and talk monthly, have weekly calls and personal conversations at the highest level. This is where such dialogue should take place,” Stellantis said. 

Dealers are concerned that Tavares’ recent production cuts will further reduce market share and criticize his lack of investment in Stellantis’ aging lineup, including discontinuing the Jeep Cherokee without a replacement. Jeep’s U.S. sales dropped 9% in the first half of the year, and Ram pickups fell 20%.

Despite these issues, Tavares received a €36.5 million compensation package, making him the highest-paid CEO in traditional auto manufacturing. In June, he admitted to being slow in addressing U.S. challenges like inventory buildup, stating, “We were arrogant.”

Dealers, frustrated by high inventories and insufficient incentives, want more consumer-focused promotions to help sell older models. They urged Tavares to act quickly in a letter, inviting him to their Oct. 15 meeting, warning the problem is worsening, according to the report.