CEO Carlos Tavares of Stellantis stepped down this past weekend amidst the ailing carmaker’s flagging sales and “differences” with its board of directors. Taveres’ resignation comes in the wake of a stunning 27% drop in revenues compared with last year.
Ailing Stellantis, parent of Chrysler, Dodge, Jeep, and Ram, began unwinding a spool of lay-offs, including 1,100 at its Jeep plant in Toledo, Ohio and 1,100 at its Warren, Michigan Wagoneer and Grand Wagoneer plant last month.
The troubled Big-Three manufacturer shuttered a plant in the UK yesterday.
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Over the past 5 days:
CEO Stellantis: ❌
CFO Nissan: ❌
And this is likely just the start of major leadership changes at struggling automakers.
As the saying goes, you only find out who’s swimming naked when the tide goes out—and 2021-2022 was one massive tide.
— Car Dealership Guy (@GuyDealership) December 2, 2024
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Ford Motor Company, too, took workers off the Bronco line at its Warren facility, citing flagging demand.
Meanwhile, Volkswagen saw strikes overseas after it proposed layoffs and plant closures.
In an about face from pandemic shortages and high demand spurred by a low interest rate environment, struggling automakers have now seen backlogs of inventory on dealer lots, production cuts, and layoffs — anything but price cuts.
Car prices have shown little, if any, sign of falling. A 2024 full-sized sedan averages over $46,000, slightly off pandemic highs, but the mid-sized segment hit its highest average this year at over $33,000. Full-sized SUVs, such as Stellantis’ Wagoneer and Grand Wagoneer, hit an all-time high, averaging $76,500 this year. Full-sized trucks, too, hit a high over $65,000.
November data from the auto loan industry shows delinquencies up, especially in the subprime segment.
Demand for electric vehicles has wavered, with GM offloading a battery plant, and industry giants across major brands withdrawing earlier bellicose estimates for EV production and demand forecasts.
Meanwhile, Stellantis cited demand for EVs and a $97.6 million upfit for the Warren plant to produce an electric Wagoneer there in its decision to suspend the line. Is Stellantis that out of step with other manufacturers dialing back EV investment?
Other manufacturers also face lagging demand and a backlog of inventory on dealer lots,
Nissan and Jaguar, too, have been rumored to be running on fumes, with the potential demise of those brands on the horizon. Jaguar’s backfiring brand reboot cannot have helped the Tata-owned former British powerhouse.
Auto manufacturing jobs in Michigan have only just clawed back to levels seen before the 2008 global financial crisis and subsequent auto industry bailouts — barely more than half pre-NAFTA.
Ohio’s auto plant jobs haven’t fared as well.
EV demand or no, the macroeconomic headwinds to selling expensive cars — in a higher interest rate environment with inflation refusing to fade into the rearview mirror — may be taking its toll.
However, depending on economic conditions, automakers may have one ray of sunshine: consumer auto sentiment has been improving.
Broader consumer sentiment fell only modestly in November, according to new data from the University of Michigan, though its remaining relatively stable conceals a major partisan reversal. Previously, Democrat sentiments were flying higher. Today, Republicans feeling rosier has kept consumer sentiment strong.