Surprise! Stellantis Retaining All Fiat Chrysler, PSA Group Brands, Plants, and Jobs

Don’t expect French automaker Peugeot to return to the U.S. anytime soon. Now that PSA Group has merged with Fiat Chrysler Automobiles to create Stellantis, adding another brand to the U.S. market has lost its urgency. At this stage, no final decision has been made, says PSA Group CEO Carlos Tavares, who held his first press conference […]

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Don’t expect French automaker Peugeot to return to the U.S. anytime soon. Now that PSA Group has merged with Fiat Chrysler Automobiles to create Stellantis, adding another brand to the U.S. market has lost its urgency. At this stage, no final decision has been made, says PSA Group CEO Carlos Tavares, who held his first press conference as Stellantis CEO today. But bringing back Peugeot, which left North America in 1991, is not a priority for Stellantis which will focus on making existing brands profitable in North America before adding new ones, Tavares said.

“We don’t need to introduce more brands than the ones we have in the U.S.,” Tavares said during a press conference that lasted almost two hours. And that wasn’t the only big revelation—another surprise to emerge from today’s Stellantis introduction is that the new conglomerate plans to keep all 14 of the brands being collated in the Fiat Chrysler–PSA Group merger.

So, No Brands Are Dying? Really?

While Peugeot is unlikely to keep its pre-merger plans to come stateside by 2026, Tavares says the 14 existing brands of the two companies forming Stellantis will remain, and the plan is to use the company’s scale to grow and improve them. That kind of reassurance comes as industry observers feared the new company would shred brands. Instead, Stellantis is taking the more difficult road of rebuilding their troubled brands with marketing and new (shared and rebadged) product.

On the FCA side of the house, which you’re more likely familiar with, Jeep and Ram were never thought to be in danger given their profitable contributions. They will be well fed with the resources needed to prosper. But Chrysler, Dodge, and Fiat sure were in doubt, with each potentially making the case for their lack of making a case for themselves before Stellantis’s reassurances.

European brands Fiat, Alfa Romeo, and Maserati especially have not lived up to expectations in North America. Some of that will be addressed with improved marketing of the brands, Tavares says.

And some of it will be the ability to add more models in a cost-conscious manner by using shared platforms, powertrains, and other components, as well as shared R&D, and the scale to reduce procurement costs. Models deemed not profitable before might be added now with the company’s scale and ability to use sister models, Tavares says.

Importance of Alfa Romeo and Maserati

Tavares says he recognizes the “grand value” and importance of the Alfa Romeo premium brand and Maserati luxury brands, and a long-term strategic plan is being developed for their profitable growth.

Platform sharing to add “sister vehicles” might also help expand Chrysler and Dodge, which have become almost niche brands, one offering a large sedan and a minivan and the other a small selection of large vehicles available with huge horsepower.

Overall, Tavares said he is “reasonably confident” Stellantis can help existing U.S.-market brands rebound.

Management Teams Creating Long-Term Plans

The new CEO has created nine management teams to study opportunities and create strategic plans and stress tests for the brands. Part of their mandate is to ensure each brand has a unique role and flavor.

For a sense of Tavares’ ability to revive a brand, look at Opel, a brand that PSA Group bought from General Motors in 2017, along with Vauxhall. After decades of losses, Tavares turned Opel’s fortunes around in 18 months. Opel has a “fantastic product plan coming,” the CEO says.

The nine committees will make relevant decisions in areas such as business review, strategy, global programs, regional goals, plants, brand and styling review.

Roles for Key FCA Personnel at Stellantis

The executive team at Stellantis retains key former FCA personnel. Mike Manley is head of Americas, with Mark Stewart chief operating officer for North America; Richard Palmer is chief financial officer; Ralph Gilles leads design for Chrysler, Dodge, Jeep, Ram, Maserati and Fiat Latin America, while Jean-Pierre Ploue is design chief for Abarth, Alfa Romeo, Citroen, DS, Fiat Europe, Lancia, Opel, Peugeot, and Vauxhall.

At the brand level, Christian Meunier leads Jeep, Mike Koval heads Ram, and Tim Kuniskis oversees Dodge and is interim head of Chrysler, while Davide Grasso retains Maserati.

History in the Making

The $52 billion deal that created Stellantis was finalized on June 16, creating the fourth-largest automaker in the world by volume. The new company, headquartered in Amsterdam, will have combined annual sales of about 8.1 million vehicles and annual profits of about $14.5 billion. The combined company sells vehicles in more than 130 countries and has plants in more than 30.

Stellantis does not need one unique culture, Tavares, says. He sees the company’s diversity, with 400,000 employees representing 150 nationalities, as a strength and an asset to leverage. Tavares said the new company has $6.1 billion of synergies and will realize 80 percent within four years. The reduction in annual costs will be done without closing any plants—they will be made more efficient—or laying off employees.

More Electric Vehicles Coming for Stellantis

Savings will also go toward dedicated electric platforms, new models, and autonomous vehicle technology. Stellantis has 29 electric models on sale now. That will grow to 39 EVs on sale by the end of 2021, and by 2025 Stellantis will have one EV for every newly launched global model. The challenge, Tavares says, is making them affordable.

Stellantis is now listed on the New York, Paris and Milan stock exchanges. Despite a pandemic that hit the world after the two automakers announced merger plans in October 2019, the two sides pulled it off. One effect of the economic impact of the coronavirus is that the two automakers did some cost-cutting ahead of time to ensure the viability of the new company.

China Is Area of Concern

One area of concern is China where both PSA and FCA have had disappointing results. An executive team is studying what went wrong and diagnosing roots causes of difficulties to come up with a new strategy. All scenarios are on the table except doing the same thing, which was not working, Tavares says. A plan should be ready in a few months to improve sales in China.

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