Stellantis CEO hints at brand closures amid huge profit drop
American-European giant Stellantis is recording increasingly poor financial results, and the head of the company, Carlos Tavares, does not shy away from making strong and controversial statements. The future of several brands may hang in the balance.
8:11 PM EDT, July 26, 2024
As reported by "Bloomberg," Stellantis's net income in the first half of 2024 fell by as much as 48 percent, and the operating margin was less than 10 percent—significantly worse than the targets set for this year.
The situation is becoming increasingly serious, so much so that the company's head does not rule out final solutions. During a conference on the company's financial results organized on July 25 at 10:00 AM ET, Tavares stated that he would not hesitate to abandon unprofitable brands.
He stated that if the brands do not generate profit, they will be shut down, as they cannot afford to keep non-profitable brands. This is a clear shift in direction and a departure from earlier assurances. In 2021, during the creation of Stellantis, Tavares swore that all brands in the portfolio had a future.
Today, the situation looks completely different, and although the head does not disclose which companies are most at risk, analysts point to three of them. According to "Bloomberg" and "Reuters," Maserati is under scrutiny, having recorded a 90 million-dollar loss in the first half of 2024. It is also unofficially mentioned that DS and Lancia are at risk due to their marginal contribution to overall sales. Final decisions, however, have not yet been made.
It is worth mentioning that Tavares is known for radical cost-cutting. Stellantis continually tightens its policies on reducing labor and logistics costs while the head readily grants himself hefty salaries. Last year's 43 million-dollar package made him the best-paid CEO among traditional car manufacturers.
