Stellantis CEO Tavares has resigned

[alphawolff]

We should think of Toledo North (the plant where all our JL's come from) as an *assembly* plant. Hardy any of the parts, if any, are actually *made* there. Jeeps are designed and spec'd out by Stellantis Engineers, then most of the subassemblies and parts are all farmed out to a large supplier base. Those suppliers then send their parts into the plant and the JL is then assembled and shipped.

It might sound like a nit-picky distinction, but that type of "global manufacturing" is commonplace across the industry and leads to engines, transmissions, axles, etc. being sourced from all sorts of companies / suppliers.

Big issue we've had recently is Travares hard lined suppliers into underpaying them. It got to a point where suppliers outright refused to continue supplying parts to Stellantis as they weren't making a profit off the deal anymore. This led to Stellantis suing the supplier into compliance (like that's going to work?).

As a result Stellantis has lost contracts with a lot of first tier suppliers over the last year or so. It's why it takes MONTHS and MONTHS to find new supply for shit that should be easy to obtain. An example of this are the 3.6L thermostats which have been consistently backordered for over a year now.

Not only do we have vehicles being designed like shit and built like shit, but we also are unable to get parts to fix them. When people say the new CEO will have his work cut out for him they aren't kidding. Just about every single aspect of our business has been collapsing.


A significant portion of our qualified engineers were fired to save cost.
A significant portion of our part suppliers have jumped ship due to Stellantis' refusing to pay them
A significant portion of our manufacturing workers are being let go and then returned to work (with forced OT due to the missed weeks) on a monthly basis, this leads to the average UAW worker not giving a fuck as they could be let go at any minute.
A significant lack of qualified technicians. Most dealerships have maybe one or two knowledgeable or qualified technicians, if they're lucky. This leads to long leads time for service. Stellantis warranty pay is also abysmal, especially with the most recently released models. This leads to technicians not being incentivized to do the repairs properly, which leads to even more customer satisfaction issues.

This is just from the service side of things. I don't keep up with (or care) about the sales side of things. We're over priced and our quality is horrendous. I'm surprised we even sell units these days.

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[Powelligator]

Exactly. An important part of manufacturing like this is building good relationships with the very suppliers that the factory depends on. What happens when an outsider - who is known for cost cutting - comes in and starts messing with those relationships, well the outsider, Tavares in this case, has no skin in the game and just figures that someone from his side of the ocean will step in if an existing North American supplier bails on the contract. Then he finds out that the part cannot easily be replaced and then you get what is described above, poor morale, poor quality, lack of trust by the dealership network, etc.

Not always a good idea bringing in "fresh blood" from the outside. Assembling complex automobiles is really a team effort, that philosophy is lost on the harvard MBA bean counters and european management.

 

[Heimkehr]

A significant portion of our qualified engineers were fired to save cost.
A significant portion of our part suppliers have jumped ship due to Stellantis' refusing to pay them
A significant portion of our manufacturing workers are being let go and then returned to work (with forced OT due to the missed weeks) on a monthly basis, this leads to the average UAW worker not giving a fuck as they could be let go at any minute.
A significant lack of qualified technicians. Most dealerships have maybe one or two knowledgeable or qualified technicians, if they're lucky. This leads to long leads time for service. Stellantis warranty pay is also abysmal, especially with the most recently released models. This leads to technicians not being incentivized to do the repairs properly, which leads to even more customer satisfaction issues.

The clearest example of what's been recurringly discussed on the forum, re: Stellantis's poor stewardship of the Jeep marque.

It was that sort of intel that informed my decision to dissuade a family member from purchasing a Wrangler. She had originally intended to do so, and then walked away due to price fatigue after observing the recurrent MSRP growth. When she floated the idea of getting back in the game, I talked her out of it. I suggested that my good history with an FCA-era Wrangler likely won't be her experience with what Toledo is crapping out right now.

 

[Oncorhynchus]

The soul of the Wrangler still feels very much rooted in its tradition. The poor management when it comes to running a global operations behemoth with a large distributor (dealer) network has nothing to do with which country the CEO is from.

The point I am trying to remind everyone is that the agglomeration of car companies that is collectively known as Stellantis has to contend with the nationalistic machinations of a variety of countries when it comes to its leadership and financial structure, often to the detriment of shareholders and customers and dealers and employees.

 

[JL.FR]

You forget a little quickly the demand of investors. They wanted a (big) return on investment quickly which Tavares did. In the industry there is no miracle, either you sell a lot and expensive, or you lower costs or a bit of both. 2022 and 2023 were great for them, double-digit profit

 

[Oncorhynchus]

You forget a little quickly the demand of investors. They wanted a (big) return on investment quickly which Tavares did. In the industry there is no miracle, either you sell a lot and expensive, or you lower costs or a bit of both. 2022 and 2023 were great for them, double-digit profit

True, the disease that is the worship of maximizing shareholder value needs to finally go. If a CEO truly believes that is the most important thing then why are they working in the auto industry? Is it because he is not smart enough to be CEO of Google or CEO Goldman Sachs? Great business leaders understand the healthy tension in balancing employees, customers and investors interests along with the social contract that firms with the citizenry at large within the countries that they operate. After all these decades have passed since they published their most prominent works, I see Jim Collins as having the more insightful view about businesses than Milton Friedman.

 

[JL.FR]

Reliability issues are also present in Europe on brands that did not have them before. This is largely due to the complexity of the vehicles that are requested by influential "technocrats" and environmentalists. The forced electrification of vehicles costs a mountain to manufacturers and is not profitable by the ridiculous sales if they are not helped by the states. (less and less in Europe)

 

[alphawolff]

You forget a little quickly the demand of investors. They wanted a (big) return on investment quickly which Tavares did. In the industry there is no miracle, either you sell a lot and expensive, or you lower costs or a bit of both. 2022 and 2023 were great for them, double-digit profit

This hurts a lot of industries. The business becomes an engine of profit generation for the share holders at the expense of the business' reputation and future profits. The current share holders get their cut then bounce, leaving the business in shambles.

All fine and dandy until you realize Stellantis as a whole is one of the biggest employers in the world with a lot of folks relying on its continued operation for their livelihoods. So many once fantastic businesses were run into the dirt because of this shit. Stock buybacks being a legal thing is absolutely baffling to me, as any profit the business makes should be reinvested back into the company with a small portion going to dividends. The better the company does the bigger the dividend. That should be the primary draw for investors (in addition to share price increasing as a result) rather than artificially increasing share price by deleting shares out of existence with improperly allocated revenue.

Reliability issues are also present in Europe on brands that did not have them before. This is largely due to the complexity of the vehicles that are requested by influential "technocrats" and environmentalists. The forced electrification of vehicles costs a mountain to manufacturers and is not profitable by the ridiculous sales if they are not helped by the states. (less and less in Europe)

Making a proper working EV/Hybrid/PHEV isn't hard, just look at Toyota. The problem is our cost cutting has moved most engineering positions to LCCs (Low cost countries). This means that highly qualified engineer is no longer responsible for designing the product, but some dude in India fresh out of school working for 1/10th the cost. You get what you pay for when it comes to R&D, and it's obvious we've shit the bed hard recently.


Even my STAR team support has been outsourced to India. Some of the replies I get these days are in such broken English I want to just throw my hands up in the air with frustration and tell the customer "it's royally fucked, good luck."

I have to repeat myself two, three, and sometimes even four times. And they still just copy paste shit out of service library as a response. It is insane. I had one just last week tell me to reset and re-flash a module *twice* after repeating myself multiple times that the module was dead on the network. It needed to be replaced but the part could only be ordered through STAR themselves. Shit is asinine at this point.

 

[CT_LFC]

I have to repeat myself two, three, and sometimes even four times. And they still just copy paste shit out of service library as a response. It is insane. I had one just last week tell me to reset and re-flash a module *twice* after repeating myself multiple times that the module was dead on the network. It needed to be replaced but the part could only be ordered through STAR themselves. Shit is asinine at this point.

The way companies offshore things is so frustrating. They don't care that it makes things worse, just that it costs less.

At my previous company they decided to outsource the local credit team to Mexico, a team that had a terrific performance and had past due accounts less than 5% of the accounts receivable and had great relationships with the customers.

Not just did they tell them they were being laid off, they also had them train the people in Mexico who were going to take their jobs.

As expected, customer relationships suffered and PD % started to increase.

You see that a lot with large companies. Accounts Payable is the same thing. They move jobs from the business to a "center of excellence" and it's a mess, because people just care about volume of invoices paid so when there's an issue with an invoice, they just put it to the side and grab the next one instead of figuring out what's wrong and fix it. Then one day the business gets an email from their vendor that they are being placed on no-ship because of past due invoices and hell breaks loose trying to find out what happened and how to get replacement parts/services.

 

[Omen]

Here. Have a light beer.

Oh the horror...
Reminds me of a joke.

Why is American beer like sex in a canoe?

Because it's f#cking close to water.

 

[Heimkehr]

Why is American beer like sex in a canoe?

Because it's f#cking close to water.

Why do you think I offered it to our Continental friend?

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