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.”
Stellantis said it has been collaborating with retailers to boost sales. In August, it introduced an action plan developed with dealers that it said already was having positive effects.
The company said its August sales were up 21 percent over July, market share rose 0.7 points and inventory shrank about 10 percent for two consecutive months.
“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 Sept. 11 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 said personal attacks, such as the open letter criticizing Tavares, aren’t the most effective way to solve problems. The company said it would continue working with dealers to avoid any public disputes that could hamper its ability to deliver results.
But some dealers say they can’t afford to continue waiting for the factory to do the right thing.
“We’ve had many cry-outs for help, and we’re just not getting where we need at a quick enough rate,” said one dealer who asked not to be identified. “They fix one thing, then they take two things away, and it’s like you’re on unstable ground. We’re constantly chasing our tail. I’m done chasing my tail. Let’s fix this.”
Stellantis also has pushed back against attacks made by Fain, who described its management as “out of control.” In a Sept. 17 statement, the company denied Fain’s contention that it had confirmed plans to move Dodge Durango production out of the U.S.
The automaker said Fain hasn’t provided any evidence to back his claims that it has violated its 2023 contract with the union, though it has acknowledged that plans to reopen an Illinois assembly plant in 2027 are being delayed. Stellantis said that doesn’t amount to breaking the contract and that the union can’t strike over changes in product plans that relate to plant performance and outside factors it doesn’t control.
The union has filed unfair labor practice charges with the National Labor Relations Board accusing Stellantis of illegally refusing “to provide information about the company’s plans regarding product commitments it made in the UAW’s 2023 collective bargaining agreement.”
Stellantis said those commitments span the life of the contract, which runs through April 2028, so the UAW shouldn’t expect them to be underway in the first year.
“We would all be better served if these issues were addressed across the table with productive, respectful and forward-looking dialogue,” the company said. “A strike does not benefit anyone — our customers, our dealers, the community and, most importantly, our employees.”