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Le Monde
Le Monde
19 Jun 2024


Images Le Monde.fr

"We don't make cars anymore, we make dough." Calm and level-headed, Benoît Vernier, CFDT central union delegate at Stellantis, isn't in the habit of exaggerating. But he is concerned about his company. With sales of electric cars down, production of the battery-powered 3008 not off to a flying start and inventories piling up in the US, the pressure on earnings is at its highest.

To meet the targets announced to the financial markets, chief executive officer Carlos Tavares has axed costs and staff. Employees were accepting this method when PSA had to be saved in 2014, before it then successfully merged with Fiat Chrysler in 2021, but it is becoming increasingly difficult. "We don't know where Carlos Tavares is going to stop, particularly on research and development," said Vernier. In Brazil or India, an engineer's salary costs 25% to 30% less than in Europe or the US. Stellantis wants to take advantage of this. What will remain in France in the long term? On the other side of the Alps, Italian unions are asking the same questions.

But they are no longer alone. And the Tavares method is beginning to raise doubts, beyond its usual critics such as employee representatives. In a note published on May 21, Philippe Houchois, financial analyst at Jefferies, said: "We are sensing signs of fatigue among the Stellantis teams, due to departures and concerns about the automaker's ability to make up lost market share or further adjust to declining volumes."

Since the merger, market share in the US has fallen from 12.6% to 8.5% and Stellantis' share in Europe from 21.6% to 16.5%. It's dizzying, even if the brands are selling their models at higher prices, with higher margins. The analyst also noted that Tavares' relations with "the industrial ecosystem" – his suppliers but also his distributors – are very strained. He has questioned whether Stellantis' strategy "has gone too far." The Group's operating margin, which had soared to the level of Mercedes in 2023, fell back at the beginning of this year. He challenged his boss: "Has Carlos Tavares fallen asleep behind the wheel?"

To answer these questions, Stellantis held a "capital market day" for analysts and investors at its US headquarters in Auburn Hills, Michigan, on June 13. On arrival at the Detroit airport, one of the participants from Europe was stopped by the customs officer: "Ah, you've come to Stellantis. Are you going to talk about the latest redundancy plan?" The 400 engineering job cuts announced in March have left their mark. Between 2021 and 2023, Stellantis' workforce shrunk by 12% in Europe and 13% in the US. In France, a collective severance agreement hopes to lay off a further 1,300 people by August 2025. Dozens of IT site employees are being transferred to a service provider, Kyndryl (ex-IBM). Outside China, the automotive market never recovered the sales volumes it enjoyed before the Covid-19 pandemic.

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