New Stellantis CEO faces slew of challenges, vows to keep away from ‘mediocrity’
DETROIT — “Mediocrity just isn’t well worth the journey.”
That was a part of incoming Stellantis CEO Antonio Filosa’s first public message after being named to steer the worldwide automaker. It was a mantra many years within the making, as he spent 25 years climbing by the corporate’s ranks, ranging from a task as an evening shift paint store supervisor in Spain.
The quote additionally referenced late Fiat Chrysler CEO Sergio Marchionne, a mentor of Filosa’s who’s revered within the firm. Marchionne unexpectedly died in 2018, years earlier than the automaker merged to type Stellantis, the dad or mum for manufacturers akin to Jeep, Ram, Fiat and Chrysler.
A number of former and present Stellantis executives and workers who’ve labored with Filosa highlighted his connection to Marchionne when talking with CNBC. Additionally they described him as a fascinating, collective chief who is aware of the enterprise effectively, from the manufacturing facility flooring to C-suite workplaces, however who faces a slew of challenges and checks forward.
As Filosa formally steps into the CEO function on Monday, he might want to channel Marchionne — considered as a dynamic govt and thinker who saved Italian automaker Fiat and America’s Chrysler — to achieve success in turning across the embattled carmaker.
The latest CEO, Carlos Tavares, who spearheaded the merger to type Stellantis, abruptly resigned in December amid disagreements with the corporate’s board, yearslong gross sales declines and a 70% drop in web revenue final 12 months. He, like Marchionne, was thought-about a dynamic CEO by these inside and out of doors the corporate, however many thought he centered an excessive amount of on price cuts, to the detriment of the enterprise.
Along with monetary points, trade specialists stated Filosa might want to proceed to fix bonds with sellers, politicians and workers that had been broken throughout Tavares’ tenure. And he’ll need to deal with the corporate’s funding plans between conventional autos and “electrified” fashions akin to hybrids and EVs.
“We have to handle the transition, proper? It’s not a secret that electrical autos can be [a] sturdy a part of the long run, proper? Not just for Stellantis, however for the automotive trade itself,” Filosa, then-Stellantis’ head of the Americas, informed reporters in January. “The tempo and the pace, in all probability one thing that must be barely reassessed.”
Filosa, at the moment, stated it is going to be on the brand new CEO to determine the tempo. He described the corporate’s points as “a multitask problem” for whoever the board would appoint, which finally was him.
‘Multitask problem’
Filosa, a comparatively younger CEO at 51 years outdated, has hit the bottom working since Tavares promoted him from Jeep’s CEO to chief working officer of Stellantis’ Americas operations, the place he prioritized mending strained bonds.
Staff had been distraught over cuts and layoffs, whereas the corporate’s franchised retailers had been furious about Stellantis’ gross sales and market share losses below Tavares. The Stellantis Nationwide Supplier Council in September penned an unprecedented open letter condemning Tavares’ actions.
“Your individual distribution community, your vendor physique, has been left in an anemic and diminished state,” Kevin Farrish, a vendor in Virginia who led the council, wrote within the letter.
Michael Bettenhausen, a vendor in Illinois who succeeded Farrish, has spoken fondly of Filosa however stated there may be nonetheless lots of work to get performed.
“We have to mutually work collectively and dive into all the problems right here within the North American operations, and we stay up for Antonio nonetheless being part of these discussions,” he stated.
Stellantis’ world gross sales below Tavares fell 12.3% from 6.5 million in 2021 — the 12 months the corporate was fashioned — to five.7 million in 2024. That included a roughly 27% collapse within the U.S. in that interval to 1.3 million autos offered. The automaker dropped from fourth is U.S. gross sales to sixth, falling from an 11.6% market share to eight% throughout that time-frame.
Filosa — a local of Naples, Italy — stated in January the highest precedence for the U.S. was to develop retail market share, which incorporates gross sales to clients versus these to fleets or companies.
“We have to do this. It’s not a perception; it’s a necessity,” he stated. “The U.S. retail market share actually measures your skill to organically [grow sales].”
The automaker stays in a product dearth, bringing its general gross sales down roughly 12% in the course of the first quarter of this 12 months in contrast with the identical interval a 12 months earlier. The corporate declined to launch its year-to-date retail gross sales.
However new merchandise such because the upcoming redesigned Jeep Cherokee, further Ram 1500 pickup truck fashions and a brand new gas-powered Dodge Charger are anticipated to spice up gross sales, in addition to the automaker’s high line.
Stellantis’ income has grown for the reason that firm was fashioned however plummeted 17.2% 12 months over 12 months in 2024 to 156.9 billion euros ($180.6 billion), whereas different automakers akin to Normal Motors and Ford Motor noticed notable will increase of their high traces.
“Filosa steps into the CEO function amid vital challenges for the corporate,” RBC Capital Markets analyst Tom Narayan wrote in a Might 28 investor observe. “His fast priorities embody revitalizing the corporate’s efficiency within the US market, streamlining Stellantis’ intensive 14-brand portfolio, and mending strained relationships with sellers, unions, and governments.”
‘A logical alternative’
Filosa’s appointment to CEO was considered as a secure, “logical alternative” for the automaker because it makes an attempt to deal with its self-inflicted points, in addition to regulatory uncertainty akin to tariffs and world financial considerations, based on trade insiders and observers.
“I feel it’s a logical, credible alternative,” Tavares informed Bloomberg in late Might in his first interview with worldwide media since leaving the corporate. “Hopefully, he can be correctly supported by the board. So let’s see.”
Since being introduced as CEO on Might 28, Filosa has visited lots of the automaker’s vegetation within the U.S., Canada and Europe. He was reportedly chosen following a six-month search that included different inside and exterior candidates.
His public feedback concerning his new place have painted him as a humbled, grateful govt and father who takes satisfaction in connecting with folks.
“I’m really honored to be appointed CEO of this nice firm, Stellantis. It has been my house for 25 years. This place is in my blood,” he stated a Might 28 LinkedIn put up, referencing Marchionne.
A handful of present and former Stellantis executives described Filosa as an “partaking chief” and “listener” who’s significantly comfy inside vegetation and talking with workers — very similar to Marchionne.
“I’ve labored facet by facet with him. … We grew up below Sergio,” Stellantis’ world head of design, Ralph Gilles, informed CNBC. “He’s a folks particular person. He’s a visionary, he’s energized, he’s younger … and he’s curious. He’s an important listener. I really like his problem-solving talents, and for me, he loves design.”
Marchionne would seek advice from his executives as “children,” lots of whom, like Gilles and Filosa, he appointed to their first high-profile management positions. Others nonetheless with Stellantis embody Ram CEO Tim Kuniskis and Chief Advertising Officer Olivier Francois.
“Antonio’s superior,” Kuniskis, who unretired after a seven-month hiatus final 12 months, informed CNBC. “He’s one of many driving forces for me wanting to return again.”
Stellantis CFO Douglas Ostermann earlier this month touted Filosa’s background in manufacturing and constructing the corporate’s Latin American enterprise, which has remained a excessive profitability area for the corporate.
“He’s a really form of open chief that I feel actually works effectively with throughout the group, throughout folks, throughout manufacturers, form of a relationship builder,” Ostermann stated throughout a Bernstein occasion.
Upon Filosa’s appointment, Bernstein analysts in an investor observe described him as a “secure pair of palms” however a comparatively uninspiring alternative for traders in contrast with an outdoor rent akin to ex-Apple CFO Luca Maestri, whom the corporate was reportedly contemplating.
“I feel traders had been fairly excited concerning the prospect of bringing in any person from the skin,” Bernstein analyst Daniel Roeska informed CNBC. “Not that there wasn’t anyone inside, however after form of such a giant mix-up, traders thought the concept of bringing one thing from the skin was a great one.”
Filosa hasn’t had a lot expertise in such a high-profile function, in contrast to Marchionne and Tavares, who had been examined automotive veterans. He got here up by the corporate’s Latin American operations and has solely served a short while in North America — its most important market. Whereas Italian, he additionally has restricted work time in Europe, the automaker’s second most vital area.
Two sources who agreed to talk on the situation on anonymity to have the ability to converse freely additionally stated he’s a nostril to the grindstone chief who might be demanding at instances, much like his predecessors and different CEOs.
Filosa additionally might want to restore investor confidence, which each Marchionne and Tavares had been comfy doing. Three sources, together with two firm insiders, stated he doesn’t but have the CEO prowess like his predecessors, one thing which will include expertise.
UBS analyst Patrick Hummel famous in a monetary observe final month that Filosa’s interplay with the monetary neighborhood additionally has been “restricted” to a capital markets day in June 2024.
Traders didn’t react strongly to the CEO alternative, based mostly on the corporate’s inventory worth. When Filosa was introduced as CEO on Might 28, U.S.-listed shares of the inventory declined 3.2%. Since then, the shares are off roughly 10% amid a litany of out of doors elements.
The each day inventory decline is definitely much like when Marchionne made his “mediocrity” feedback in the course of the firm’s first investor day after combining Chrysler and Fiat to make “Fiat Chrysler Cars,” or FCA, on Might 6, 2014. Shares fell 3.9% that day.
Marchionne, a philosophy main who was identified for his astute remarks, was discussing the challenges forward for the automaker and altering automotive trade, together with not chasing unprofitable companies — which Filosa and Stellantis should proceed to deal with.
“I informed you this morning that our FCA tradition responds higher when it’s confronted with objective and with problem,” Marchionne stated. “And our plan has objective as a result of when all is claimed and all is completed, mediocrity just isn’t well worth the journey.”