Leaders of Stellantis NV's U.S. dealer network criticized CEO Carlos Tavares for the “rapid degradation” of the automaker’s brands and urged him to spend more money to clear old inventory off their lots.
The retailers accused Tavares of “short-term decision making” that boosted profits last year and padded the CEO’s compensation. The moves ended up shrinking the company’s market share and hurting the Jeep, Ram, Dodge and Chrysler brands, the national dealer council said in an open letter to Tavares dated Sept. 10.
Tavares has been cutting jobs and slashing capacity at American factories since a plunge in U.S. sales sliced first-half earnings nearly in half. Stellantis has taken steps this year to clear vehicle inventories, including cutting prices and bringing back incentives. But those steps have been insufficient as the company tries to protect its prized profit margins, according to dealers.
“For over two years now, the U.S. 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 group said in the letter. “A disaster not just for us, but for everyone involved — and now that disaster has arrived.”
Stellantis said it took exception to the letter and that it doesn’t believe public personal attacks are the most way effective way to solve problems.
The company said it introduced an action plan in August that was developed with dealer input.
The plan, the company says, is already showing results. According to Stellantis, U.S. sales in August were up 21 per cent 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 per cent in total.
“This is the result of working together with our dealer network and we want to thank them for their constant support and engagement,” the company said in a statement. “We meet and talk monthly, have weekly calls and personal conversations at the highest level. This is where such dialogue should take place.”
Stellantis says it has started a down a new path that will prove successful and that it will “continue to work with our dealers to avoid any public disputes that will delay our ability to deliver results.”