Italian lawmakers questioned Stellantis CEO Carlos Tavares about the struggling automaker’s strategy in a parliamentary committee meeting. The company, which produces Jeep and Chrysler vehicles, recently announced a management shakeup in an effort to improve sales. The Italian government is seeking clarity on Stellantis’ production plans for the country, as the company faces a national metal workers strike scheduled for Oct. 18. Amid concerns over a negative cash flow of up to 10 billion euros, Tavares highlighted the challenges in the car-making industry due to EU carbon emission rules and customer reluctance towards expensive electric vehicles.
Tavares, who has faced criticism from U.S. dealers and unions for a poor financial performance, emphasized the need for cost-cutting measures to address the challenges faced by Stellantis. He mentioned delays in factory openings, layoffs of union workers, and buyouts for salaried employees as part of the cost reduction strategy. Italian lawmakers raised concerns about the significant decline in car manufacturing in Italy, which has impacted the country’s automotive industry. Stellantis, formed from the merger of Fiat-Chrysler with PSA Peugeot, has experienced a sharp drop in output at its Italian plants, leading to a 70% reduction in production over the past 17 years.
During the parliamentary hearing, lawmakers urged Tavares to outline plans to reverse the downturn in Italy’s car industry. He highlighted the high energy costs in Italy compared to other countries, calling for governmental support to manage this disadvantage. Tavares also advocated for state incentives to boost the struggling electric cars sector, emphasizing the importance of helping citizens afford vehicles. However, some politicians criticized the hearing as lacking specifics about the future of Stellantis’ factories and investments in research and technology. The Democratic Party expressed support for autoworkers’ strike and called for meaningful discussions between the company and trade unions.
Stellantis recently announced a management shakeup, with chief financial officer Natalie Knight being replaced by Doug Ostermann, the company’s chief operating officer in China. The company also appointed new chief operating officers for North America and Europe as part of the leadership changes. Additionally, Stellantis is in the process of searching for a successor for Tavares, whose contract is set to expire in 2026. Despite the planned leadership transition, there is a possibility that Tavares may continue in his role beyond the expiration date. The company’s efforts to address financial challenges and revive sales come amidst a backdrop of ongoing labor strikes and government scrutiny in Italy.
