Good morning! It’s Monday, December 2, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. Here are the important stories you need to know.
1st Gear: CEO Carlos Tavares Abruptly Leaves Stellantis
Carlos Tavares, Chief Executive Officer of Stellantis, abruptly stepped down from the automaker after a dispute with its board over how to turn the struggling company around. Tavares had been top-dog at the massive automaker since it formed in 2021 through a merger with PSA Group and Fiat Chrysler.
Previously, Tavares said he would stay until the end of his contract in early 2026, after Stellantis began looking for a successor. Welp, that didn’t happen, and now the automaker will be helmed by an interim committee headed by Chairman John Elkann (who is currently being investigated for tax fraud) until a new CEO is named in the fist half of 2025. What a clusterfuck. From Bloomberg:
Tavares is one of a number of industry executives who’ve come under pressure as carmakers confront a slumping market that’s struggling with an economic slowdown in China, flagging demand for electric vehicles in Europe and the threat of tariffs as Donald Trump prepares to return to the White House. Nissan Motor Co. Chief Financial Officer Stephen Ma is also set to step down, people with knowledge of the matter said over the weekend.
Tavares in recent weeks was trying to regain control after setbacks that led the automaker to slash expectations for full-year profit and cash flow in late September. While European rivals such as Volkswagen AG are also struggling with weak demand, the magnitude of Stellantis’s warning alarmed investors.
Stellantis on Sunday confirmed its financial guidance for the year, but the shares are down 38% in the past 12 months.
Investors, dealers and unions took Tavares to task in recent months over sliding sales, a dated US vehicle lineup and bloated inventory, resulting in the September profit warning. While Tavares pledged fixes and moved to replace his finance chief and other executives, market share continued to decline in key markets including France, fueling concerns over the carmaker’s long-term prospects.
Here’s a little bit of Tavares’s history and how it intertwined with friend-of-the-show Carlos Ghosn.
After rising through the ranks at Renault SA under cost-cutting champion Carlos Ghosn, Tavares, 66, long impressed investors with his ability to turn around ailing automakers where others failed.
He was on track to repeat that success early on as CEO of Stellantis, reducing the number of vehicle platforms and eliminating jobs. Tensions escalated in the recent months, with unions warning that the company’s cost-cutting course was leading to quality problems and delays in the rollout of key new models. In the US, dealers accused Tavares of damaging brands such as Jeep, Dodge, Ram and Chrysler.
“He won’t be missed in North America,” said Erik Gordon, professor at the University of Michigan’s Ross School of Business. “Not by the suppliers he fought with. Not by the dealers he fought with. And not by car buyers who ignored his vehicles.”
I know this won’t come as too much of a shock, but the United Auto Workers union and its president Shawn Fain weren’t exactly sad about the news.
Fain […] welcomed the move, saying in a statement that it is “a major step in the right direction for a company that has been mismanaged and a workforce that has been mistreated for too long.”
Chief Financial Officer Doug Ostermann, who was appointed in the wake of the September profit warning, on Oct. 31 cited “good progress” in reducing inventory and improving market share trends in the US, the company’s biggest single profit pool. Ostermann is scheduled to speak at a fireside chat at a Goldman Sachs autos conference later this week.
Stellantis has also clashed with Italy’s government over its production levels in the country. Elkann alerted Italian Prime Minister Giorgia Meloni prior to Tavares’s resignation, people familiar with the matter said.
I’ve been a big Stellantis fan for a long time now. Not many automakers know how to have fun like it does, but damn, it needs to figure some shit out really quickly or this could get very ugly.
2nd Gear: Nine VW Plants Strike Across Germany
Workers at nine Volkswagen plants across Germany went on strike for two hours on December 2 as management and the folks who make them all of their money fight over the future of VW and their pay. Workers on the morning shift were on strike for two hours on Monday, and people on evening shifts are planning to leave work early.
Volkswagen says it needs to reduce costs and boost profits quickly. It has been struggling with weak demand, high production costs, a slow EV transition and stiff competition from China. From Reuters:
The crisis at Europe’s largest carmaker has hit Germany at a time of economic uncertainty and domestic political upheaval, as well as wider turmoil among the region’s automakers.
[…]
The VW strikes, which could escalate into 24-hour or unlimited stoppages unless a deal is struck in the next round of wage negotiations, will reduce Volkswagen’s output, adding to the impact of declining deliveries and plunging profit.
“How long and how intensive this confrontation needs to be is Volkswagen’s responsibility at the negotiating table,” Thorsten Groeger, who leads negotiations on behalf of the IG Metall union, said.
“Anyone who ignores the workforce is playing with fire – and we know how to turn sparks into flames,” he added.
Daniela Cavallo, the head of Volkswagen’s works council, said that VW’s biggest shareholders like the Porsche and Piech families may have to make some sacrifices when it comes to their annual dividend. How will they go on?
Cavallo said the fourth round of negotiations scheduled for Dec. 9 would either result in both sides finding common ground or an escalation.
“Unfortunately, the signals recently sent by management are not really encouraging,” she said, adding plant closures, mass layoffs and cuts to existing wages were red lines for workers.
A Volkswagen spokesperson said the carmaker respected the workers’ right to strike and had taken steps to ensure a basic level of supplies to customers and minimise the strike’s impact.
Some big sticking points that got us to this work stoppage is Volkswagen’s proposed 10 percent wage cuts as well as the threat of plants closing in Germany for the first time ever. Withholding labor is an understandable next move.
3rd Gear: Nissan CFO Latest Exec To Leave A Top Position
Nissan CFO Stephen Ma is preparing to step down from his position, making him the latest in a handful of executives to depart from the Japanese automaker during a challenging time. Right now, it’s not clear if Ma is being demoted or if he’s leaving the company outright. From Bloomberg:
The change, which comes 17 months after Ashwani Gupta left as Nissan’s chief operating officer, follows an announcement earlier this month that it will eliminate 9,000 jobs and cut a fifth of its manufacturing capacity.
As a result, Chief Executive Officer Makoto Uchida will be left as the sole top-level C-suite executive at a time when Nissan has drawn the attention of one of the most influential activist investors in Japan, Effissimo Capital Management Pte. Although six years have passed since the dramatic arrest and ouster of former Chairman Carlos Ghosn, the carmaker remains mired in management upheaval.
[…]
Ma joined Nissan in 1996 in North America and worked in financial roles in China and Japan before being promoted to CFO in December of 2019, alongside Uchida and Gupta. Jun Seki, who was also made co-COO at the time, departed quickly thereafter.
Nissan is going through a, let’s say, tough time right now.
An outdated lineup, elevated spending on sales incentives and a lack of hybrids in North America have led the Japanese carmaker to slash jobs and production. Nissan now sees its operating income at ¥150 billion ($1 billion) for the fiscal year ending in March, down 70% from its prior forecast.
[…]
Nissan’s market capitalization, which stands at about ¥1.5 trillion, has been shrinking since peaking at almost ¥6 trillion in 2015. It’s now Japan’s fifth-largest carmaker as measured by market value after Toyota Motor Corp., Honda Motor Co., Suzuki Motor Corp. and Subaru Corp.
Nissan, buddy, get your shit together. You can’t be out here being smaller than Suzuki and Subaru. C’mon now.
Ma’s departure will of course be overshadowed by news that Stellantis CEO Carlos Tavares is calling it quits as well.
4th Gear: Over 274,000 Hyundais Recalled For Broken Rearview Cameras
Hyundai is recalling 274,627 vehicles (226,118 in the U.S. and 48,509 in Canada) because of persistent failures with their review cameras that can be dangerous when drivers are backing up. It’s not an ideal situation. From Automotive News:
The recall affects the 2021-22 Hyundai Santa Fe, Santa Fe HEV, Elantra, and Elantra HEV, as well as 2022 Hyundai Santa Fe PHV and Elantra N models.
It is estimated that 5 percent of the vehicles have rearview cameras with weak solder connections that may have cracked during manufacturing and worsened over time due to heat, potentially causing the cameras to fail.
The vehicles were tested after owners reported issues with rearview camera images, such as distortion or failure, between February and July 2024. After analyzing the data, the North American Safety Decision Authority found the problem violated federal rear visibility standards, according to documents filed with the National Highway Traffic Safety Administration in the U.S.
Supplier Hyundai Mobis in South Korea, an affiliate of Hyundai Motor, is the manufacturer of the solder joints.
The broken cameras will be replaced with new, updated versions that were brought into production starting in April of 2022. Dealers and owners should be notified of the recall by January 19, 2025. Until then, Hyundai drivers are just going to have to crane their neck around while backing up like we did in the olden times.