Stellantis born into a new world

With the merger of Fiat Chrysler Automobiles and PSA Group complete, Stellantis CEO Carlos Tavares said the automaker is a stable unit that can focus on innovation. Here’s a look at several topics Tavares touched on last week:

Bottom-up approach: Tavares aims to establish a cohesive, “bottom-up” dynamic that considers input from younger workers on the company’s “strategic task teams.” He wants them to be “deeply involved in the different task teams that are going to work on the different breakthroughs that we are going to submit to them.”

Executive team: Tavares has 38 direct reports, more than twice as many as he had at PSA. He said the team is made up of “strong characters, a great deal of talent and expertise” and people who know “Stellantis is a once-in-a-lifetime opportunity.”

Peugeot in U.S.? It doesn’t appear Tavares is in a rush to bring Peugeot to the U.S., a market it was pulled from in 1991. He believes it makes more sense to focus on the existing American brands than to spend a lot of capital on a new venture.

Captive lender: Stellantis has the expertise and partners to potentially establish its own captive lender, Tavares said. “If sales financing in the U.S. is something that can help to improve the profitable business that we have in the U.S., for sure. We will consider, and for sure, we’ll look for a solution, and hopefully, we’ll be able to find one.”

Saving money: Around 80% of the total synergy amount will come from how Stellantis leverages the “volume-scale effect in the way we procure parts” and uses common platforms and parts, Tavares said. The company’s projected cost savings have risen from $4.5 billion when the merger was proposed in 2019 to about $6 billion because of ideas from cross-company teams.

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