John Elkann seeks US reset at Fiat and Jeep owner with closer ties to Trump
A new CEO of Stellantis will still need to overcome weak European demand and rising Chinese competition
Stellantis is making a multibillion-dollar gamble that Donald Trump’s shift away from electric vehicles could offer a chance for the struggling European carmaker to reboot its American operations and secure its financial future.
Since the abrupt exit of its fiery chief executive Carlos Tavares in December, the group’s chair John Elkann has made key strategic changes in the US by cancelling lay-offs, revamping the local management team and adjusting product plans.
On his first day in office, Trump has reversed a target for half of all new US vehicles sold in 2030 to be electric, while his threat of higher tariffs against Mexico and Canada could cause turmoil to operations at Stellantis. But for the carmaker, the change in US leadership and energy policy will also be seen as an opportunity.
Elkann has announced more than $5bn investments in the US, where it will roll out a range of electric vehicles, hybrids and petrol vehicles on multi-energy platforms the company developed — which were inherited from the Tavares era. This will allow it to cater to varying consumer demands even if sales of EVs slow in the American market.
Stellantis described the new administration’s “business-friendly” approach as “a breath of fresh air”. “This gave us the confidence to unlock significant investments in [Trump’s] first week in the White House,” the company added.
Elkann’s focus on the US was underpinned by a four-day trip to Washington this month to meet Trump and other US government officials to build closer ties ahead of his inauguration.
There, Elkann, the softly-spoken scion of Italy’s billionaire Agnelli family, reassured the White House that the Fiat and Jeep owner would align to its strategy even if it were to depart from existing green targets, according to people with knowledge of the meeting.
The US pivot by Stellantis comes as the global automotive industry is scrambling to respond to the sweeping changes that are set to take place during the next four years of the Trump presidency, which could also impact the global pace of the electric transition.
Telling US executives last month to “work hard to ensure our relationships with our different stakeholders ease”, Elkann stressed that “What we really need to do is sell cars,” according to one person who was present.
The group’s North America boss Antonio Filosa, is regarded as a leading internal candidate to succeed Tavares, according to people familiar with the strategy. The appointment of a new CEO is expected within six months.
In a meeting with US dealers earlier this month, Stellantis executives revealed that the group would delay the launch of the electric Jeep Recon sport utility vehicle until late this year to prioritise the launch of a mid-size SUV. They added that it could potentially add hybrid and petrol versions, according to a person with knowledge of the meeting.
Elkann recalled Tim Kuniskis, who had retired last year, as Ram Trucks chief executive. Stellantis also reversed a decision to cut 1,100 jobs at a Jeep plant in Ohio, and will protect 1,500 jobs through its promise to spend $1.2bn in an Illinois plant.
Shawn Fain, president of the United Auto Workers, has described the departure of Tavares and Filosa’s appointment “a game-changer”. “This is a leadership that is ready to recommit to investing,” Shawn said in a joint statement with UAW director Kevin Gotinsky last week.
Although Tavares cemented the merger between Fiat Chrysler and France’s PSA during his 5-year tenure, his outspoken style and tough approach to costs left the group’s relations with dealers, unions and Stellantis’s board, in tatters.
Revenues
Operating Profits
Elkann’s more conciliatory style has been a departure from Tavares, known for his charismatic but uncompromising approach, and could also pave the way for the new person to continue in a similar vein.
“We’re not going back to that,” said one person close to the discussions, referring to Tavares’s divisive character.
During his tenure as CEO, Tavares had argued that the survival of the European car industry was at stake unless the workforce and plants became more competitive. “We were just ahead of the other stakeholders’ understanding of the situation,” he told the Financial Times without commenting further on his management style.
In Europe, Elkann has also embarked on a whistle-stop tour to meet the heads of state in Italy and France, reassuring them that Stellantis would protect jobs and continue investing.
“Sometimes you’ve got to take the hit and then start again because when you have the dealers, the workers, the governments and the suppliers in opposition, it’s not ideal,” said Michael Foundoukidis, a car sector analyst at ODDO BHF.
The charm offensive to repair fraught relations with government officials, dealers and unions is a key part of the reset at Stellantis, but analysts say it could also be costly for a business hit with slowing demand and a steep share price decline.
Among the most important steps taken by the leadership has been to accelerate a strategy embarked on by Tavares: reversing a previous decision to sell its vehicles at high prices, and clear inventories to manageable levels.
In the US, Tavares’s previous plan to protect margins by maintaining high prices led to a pile-up of unsold cars, a symbol of the troubles facing Stellantis and the biggest source of tension with its dealers.
An industry survey published this month revealed that Stellantis brands Chrysler, Dodge, Jeep, and Ram were the least trusted carmakers among US dealers. Factors such as supply and management stability affected dealer sentiments, according to the company which carried out the research.
As the company cut output to reduce inventories late last year, shipments of new Stellantis vehicles to North America in the last quarter of 2024 fell 28 per cent from the previous year. The measures will hurt the group’s short term financial performance but are needed to prepare for the arrival of new products, said analysts.
In Europe, the company has taken a similar strategy in reducing stock under the new regional head Jean-Philippe Imparato, who is also seen as a CEO contender.
Barclays estimates the group’s adjusted operating profit margin to improve to 6.6 per cent this year from 6 per cent last year, but that would still be about half of the 12.8 per cent margin it reported in 2023.
Despite the changes in approach, Stellantis also faces the same challenges as the rest of the European car industry with rising competition with Chinese rivals and the long-term trend of lower sales of new cars.
And while Stellantis has promised no imminent plant closures in Italy and France, it will push ahead with plans to close a UK van factory in Luton. Tavares’s successor as chief executive could face even tougher decisions on workers if he does not manage to improve the group’s performance quickly.
“Elkann’s approach today has been to rebuild the links,” said Foundoukidis. “He’s not going to be able to do that all the time. There are obviously going to be difficult decisions that have to be taken, this year or next.”
