Stellantis Fires Back At US Dealer Council's Allegation Of 'Short-Term Decision-Making:' Carmaker Says 'Public Personal Attacks' Not The Way To Solve Problems

Carmaker Stellantis NV STLA said on Wednesday that it takes “absolute exception” to the open letter sent by the President of U.S. Stellantis National Dealer Council (NDC) Kevin Farrish to company CEO Carlos Tavares, terming it a “public personal attack.”

What Happened: In the open letter dated Sept. 10, U.S. car dealer Farrish accused Tavares of “short-term decision-making” and urged that the CEO spend more to clear older inventory, reported Bloomberg. Tavares’ decisions, the NDC President said, ended up shrinking the company’s market share and hurting its many brands.

"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," the letter said, as reported by Bloomberg. "A disaster not just for us, but for everyone involved — and now that disaster has arrived."

Stellantis, however, disputed the dealer’s concerns in its statement.

“Last month, we introduced an action plan developed with the dealer body that has already shown results. August sales were up 21% over July, market share was up 0.7 points, and dealer inventory was reduced for two consecutive months by 42,000 units or approximately 10% in total,” the company said.

“At Stellantis, we don't believe that public personal attacks, such as the one in the open letter from the NDC president against our CEO, are the most effective way to solve problems,” Stellantis said. Stellantis and its dealer network interact regularly and all dialogue must be resolved then, it added.

Why It Matters: For the first half of 2024, Stellantis reported a 48% fall in net profit to €5.6 billion ($6.22 billion) and a 14% fall in net revenue to €85 billion, owing to a dip in market share in North America.

"It is an understatement to say that H1 2024 results were disappointing and humbling," Tavares said at the company's earnings call last month.

“The Company’s performance in the first half of 2024 fell short of our expectations, reflecting both a challenging industry context as well as our own operational issues… We have significant work to do, especially in North America, to maximize our long-term potential," he said while also reiterating his personal involvement with the teams in North America to fix the issue.

In the second quarter alone, Stellantis saw its sales in the U.S. fall 21% to 344,993 vehicles. Stellantis has been cutting jobs and slashing capacity at American factories since.

However, on Wednesday, the company announced that it would invest over $406 million in three Michigan facilities including the Sterling Heights Assembly Plant, the Warren Truck Assembly Plant, and the Dundee Engine Plant. The company will make the Ram 1500 REV, its first battery-electric light-duty pickup truck launching in late 2024, at the Sterling Heights Assembly Plant, the company added.

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Photo courtesy: Stellantis