Auburn Hills — Stellantis NV CEO Carlos Tavares said Thursday that his company was “arrogant” when it failed to react quickly to a convergence of several problems in the United States in recent months, including production issues and balloon inventories .
“When I say we were arrogant, I’m talking about myself. No one else. I’m talking about the fact that I should have acted immediately,” Tavares said at an investor meeting Thursday at the automaker’s North American headquarters in Auburn Hills.
He said he should have formed a task force to address the problems, which have included production hiccups at several unnamed U.S. factories that are “not working properly.”
The CEO made the comments as Stellantis’ U.S. sales have fallen, its dealers have struggled to move cars off the lot, its factory operations have struggled at times and layoffs have taken a toll on the automaker’s market share. has fallen in the United States.
But Tavares and other Stellantis executives remained bullish on Thursday about their ability to course-correct in the region thanks to a combination of cost cuts and a series of high-profile new vehicle launches, including several electric models. Despite what Tavares called profitability “headwinds” in the United States and Europe, the automaker confirmed its overall 2024 financial guidance, including double-digit adjusted operating income of 10-11% and delivering about $8.3 billion (€7.7 billion) in dividends and refunds. this year.
Stellantis chief financial officer Natalie Knight said an influx of new models this year would account for a growing share of the company’s revenue, up to 15-20% in the second half of the year, up from 10% in the first half. . Meanwhile, she said the company plans to see lower prices on the raw materials it uses in its vehicles.
And she said the company sees more job cuts on the horizon — about $200 million companywide in the second half of the year.
“(There will be) questions about where we are in terms of cutting costs and are we at the limits or not? It’s the same as asking, do we have limits to our imagination?” Tavares said of finding areas in the company for savings.
Beyond the headcount reduction, Stellantis executives on Thursday also discussed their efforts to save money by moving more of its engineering departments to so-called “best-cost” countries such as Morocco, India and Brazil. They said they are increasingly looking to participate from suppliers in those lower-cost manufacturing countries. And they’ve reduced the company’s total vehicle platforms to just four, allowing it to streamline the design and production process across brands and models and cut costs.
The cost reduction is all in the name of the EV transition, Tavares said, and the need to stay competitive with Chinese automakers that are looking to grow into new markets around the world where Stellantis is looking to maintain its market share. The automaker has set a goal for 2030 to sell 100% electric cars in Europe and 50% in the United States.
He has repeatedly criticized rising tariffs, such as the Biden administration’s move to raise them to 100% on Chinese cars, and the European Union’s move this week to raise them as well. The tariffs are “correcting the lack of competition,” which he suggested will come back to bite some “naive” automakers in the long run.
“We go to the races, we don’t expect anyone to protect us,” the CEO said, adding that he believes it’s smarter to “expose yourself to the toughest possible competition on the planet.”
But Stellantis has also teamed up with a top Chinese EV maker, Leapmotor, to sell its low-cost vehicles in many markets, including Europe. Stellantis owns 51% of a new Leapmotor International, which will oversee the production and distribution of cars outside China.
“We will take advantage of their cost competitiveness,” Tavares said. “We’re going to use their technological mastery, namely, electric powertrains and everything related to connectivity. And we’re going to use that to our advantage through the export company (Leapmotor International).”
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