Stellantis is facing major restructuring efforts as it grapples with a significant decline in profits and sales for the first half of 2024. The automaker reported a net income of $6 billion, a sharp drop from the $11 billion recorded in the same period last year.
CEO Carlos Tavares announced bold measures to address these challenges, including the potential elimination of underperforming brands. "If they don’t make money, we’ll shut them down. We cannot afford to have brands that do not make money," Tavares stated firmly.
Stellantis, formed from the merger of Fiat Chrysler Automobiles and PSA Group, oversees 14 brands such as Chrysler, Fiat, Maserati, Jeep and Peugeot. Despite this extensive portfolio, the company has struggled with weak margins and high inventory in the U.S., prompting Tavares to focus efforts on improving these areas.
"We consider that the job is done in Europe. The job is not done in the U.S., and we are now going to take care of that work," Tavares explained.
This statement comes after Stellantis reported significant growth in the European electrified vehicle market earlier this year, particularly in key European countries.
Tavares will be working closely with the Stellantis team in the U.S. over the summer to enhance the performance of its operations and manage inventory more effectively.
During an investor meeting in June, Tavares revealed a strategy to cut costs at Stellantis by 30% to make it more competitive with Chinese automakers, expected to result in job losses at the company's U.S. headquarters in Auburn Hills, MI.
The cost-reduction plan targets operational efficiencies and cost competitiveness. "We have at least two plants that need a significant turnaround, at least two," Tavares said at the meeting. European plant managers will be brought in to oversee the changes.
A key component is the "EV first strategy," designed to streamline operations and focus on EV production.
Then, in early July, Stellantis announced it cut a shift for at least the month at its Warren Truck Assembly Plant in Michigan, impacting about 1,600 workers, after the company recorded a 21% decline in U.S. sales in the second quarter compared to the same quarter last year. The plant produces the Jeep Wagoneer, Wagoneer L, Grand Wagoneer and the Ram 1500 Classic.
