Italian lawmakers have raised concerns over the strategy of Stellantis, the world's fourth largest automaker, during a parliamentary committee meeting. Stellantis, known for producing Jeep and Chrysler vehicles, recently announced a management shakeup in an attempt to boost sales amidst global struggles.
The Italian government has demanded clarity on the company's production plans in the country, especially in light of a national metal workers strike scheduled for October 18. Stellantis issued a profit warning, projecting a negative cash flow of up to 10 billion euros by the end of the year.
CEO Carlos Tavares highlighted the challenges faced by the car-making industry, citing the 40% higher costs imposed by European Union carbon emission rules. He also noted consumer reluctance in Europe towards expensive electric vehicles, giving Chinese competitors a cost advantage.
Tavares emphasized the need for a clear roadmap to navigate the industry's technological changes, which have caused anxiety among stakeholders. Stellantis has been implementing cost-cutting measures, including delaying factory openings and offering buyouts to employees, to address financial setbacks.
Lawmakers expressed concerns over the significant decline in car manufacturing in Italy, a trend that threatens the country's automotive sector. Tavares was urged to outline plans to reverse this decline and address the high energy costs in Italy compared to other countries.
Stellantis called for state incentives to support the electric car sector, emphasizing the need to make vehicles more affordable for consumers. However, some parliamentarians criticized the CEO's hearing as lacking specifics on future investments and factory plans.
In a recent management reshuffle, Stellantis appointed new executives in key regions and announced the search for a successor to Tavares, whose contract is set to expire in 2026. The company aims to navigate the challenges ahead and revive its operations amidst industry disruptions.
