Chrysler-parent Stellantis is searching for CEO Carlos Tavares’ successor, the company said Monday, after the company’s chief financial officer laid out a plan to strengthen North America operations by slashing its bloated inventories and cutting vehicle prices.
The company said it was normal for Stellantis to initiate a search for Tavares’ replacement in anticipation of his contract expiring in January 2026, and that it is still possible Tavares will stay after that date.
Bloomberg earlier reported that Stellantis was beginning the search for Tavares’ replacement.
The automaker is aiming to cut 100,000 vehicles from its U.S. inventories by the start of next year, and has already reduced about 40,000 units in July and August, Chief Financial Officer Natalie Knight said at a BofA Securities virtual conference.
“We are living in very difficult times where there are going to be winners and losers, and a lot about being the winner is being the last man standing,” Knight said, adding that discipline on pricing and inventory would be a core part of the automaker’s strategy to weather the bumpy transition to electric vehicles.
The Jeep manufacturer is under pressure from shareholders, dealers and its unionized workforce to turn around falling sales, profits and a slumping share price.
It is facing a potential strike from the United Auto Workers union in the U.S., where local Stellantis chapters have started laying the groundwork for a nationwide walkout.
“When times are tough, you get friction everywhere,” Knight said, adding that she wanted investors to see 2024 as a transitional year, not the new normal for the Franco-Italian group.
Stellantis earlier this year said the group’s total inventories amounted to around 1.4 million vehicles at the end of the first half of this year, when its adjusted operating profit fell 40% due to a soft business performance in North America, its profit powerhouse.
Stellantis CEO Carlos Tavares visited the U.S. last month with a mission to create a plan to reverse its lagging operations there.
Tavares has led an aggressive cost-cutting strategy, resulting in reductions of salaried and factory workers. Knight said executives will continue to restructure the group’s business over the coming years.
The automaker will strive to source 80% of its supply from low-cost countries by 2028, Knight said, an effort that she said would significantly reduce its overall expenses.
It has also slashed prices on some of its vehicles, including on the Jeep Grand Cherokee and Jeep Compass, Knight said.
While Knight acknowledged the first half of the year has been difficult for the carmaker, she said conditions were expected to improve through the end of 2024. The automaker is still expecting sales of new models to contribute 15-20% of revenues in the second half of this year, Knight said.
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