Stellantis taking heat from dealers, UAW amid EV push

UAW President Shawn Fain said it’s not every day that the union finds itself on the same side as dealers.

But the two groups have become united in their belief that Stellantis CEO Carlos Tavares is mismanaging the world’s fourth-largest automaker.

Dealers say “reckless short-term decision-making to secure record profits in 2023” has left them “anemic and diminished,” piling up inventory as U.S. market share plummets. The UAW is incensed by job cuts and threatening to strike over what it says are broken promises by Stellantis, which disputes the claims.

Meanwhile, numerous high-ranking executives have left the automaker in recent months, shareholders are suing over lower earnings in the first half of the year, and pricing disputes with several suppliers have turned into unusual legal battles.The unrest comes as Stellantis presses forward with an electric vehicle offensive that is both costly and uncertain. Multiple EVs are slated to reach dealerships in the months ahead, but Stellantis retailers are still having a tough time clearing inventory from the previous model year.

“It’s time to turn production back on and start selling our way back to a respectable market share,” the Stellantis National Dealer Council wrote in a Sept. 10 letter criticizing Tavares’ leadership and compensation that jumped nearly 60 percent last year.

Ralph Mahalak Jr., who owns Stellantis dealerships in Florida, Michigan and Ohio, said having the company’s dirty laundry aired in public is unfortunate.

“We’ve never seen this before,” Mahalak told Automotive News. “We don’t understand what’s going on. And how did we get in this predicament? How can, basically, Carlos Tavares have the shareholders mad at them, suppliers mad at them, the dealers mad at them?”

Mahalak wants to see more aggressive incentives to address the inventory glut that has been a headache for retailers. The dealer council has sent Tavares at least two letters about the issue since May. Tavares met with council leaders in Detroit after the first letter and had a call with them Sept. 12 after their second plea for help.

“I’ve never felt less in control of my business than I do today,” Mahalak said, citing elevated interest rates in addition to surplus inventory. “I felt more in control of my business during the financial crisis. I felt more in control of my business during the microchip car shortage deal a few years ago, during COVID.”

Steven Wolf, who owns Helfman Dodge-Chrysler-Jeep-Ram-Fiat and Helfman Maserati of Houston, said he thinks the right incentive program could cure the company’s inventory woes quickly. Wolf said Stellantis and its dealers need to work together to get through this turbulent period and viewed this month’s letter to Tavares as a needed conversation starter.

“We’ve got to get through our current problem of too much inventory before we can start looking at ordering again,” Wolf said. “We’ve got to get the sales rate up until we can eat through this overage inventory, and then we can blow out a bunch of cars in 60 or 90 days, and we can get back to ordering normal again.”