Stellantis CEO Faces Italian Lawmakers Amid Global Challenges
Stellantis CEO Carlos Tavares appeared before Italian lawmakers on Tuesday to address concerns about the company’s strategy following a recent management shakeup aimed at reviving sales. The automotive giant faces challenges on multiple fronts, with the Italian government seeking clarity on production plans amidst a national metal workers strike.
The company recently issued a profit warning, predicting a negative cash flow of up to 10 billion euros by year-end. Tavares highlighted the impact of EU carbon emission rules, which he claims increase costs by 40% for the car-making industry. He also noted European customers’ reluctance to purchase expensive electric vehicles and increasing competition from Chinese manufacturers.
Tavares faced criticism from U.S. dealers and the United Auto Workers union due to poor financial performance and high-priced vehicle inventory. In response, Stellantis has implemented cost-cutting measures, including delaying factory openings, layoffs, and buyouts for salaried employees.
Italian lawmakers expressed concern over significant reductions in car manufacturing in Italy, threatening the local automotive industry. Stellantis has reduced Italian production by nearly 70% over 17 years, with a sharp output drop in the first half of 2024.
The CEO called for political action to address high energy costs in Italy, which he claims are double those in Spain. He also advocated for state incentives to support the electric car sector, emphasizing the need to make vehicles affordable for citizens.
Some parliamentarians, particularly from the center-left opposition, criticized Tavares’ hearing as lacking specifics on future investments. Giuseppe Conte and Elly Schlein expressed dissatisfaction with the lack of concrete plans for Italian factories and support for the autoworkers’ strike.
In a bid to address these challenges, Stellantis announced a management shakeup, replacing CFO Natalie Knight with Doug Ostermann and appointing new COOs for North America and Europe. The company is also seeking a successor for Tavares, whose contract is set to expire in 2026, though he may remain beyond that date.
As Stellantis navigates these turbulent times, the automotive industry watches closely to see how the company will adapt to rapidly changing technologies and market demands while addressing concerns from various stakeholders.
By
