Elkann Leads Stellantis Through Transition

Stellantis is navigating a critical period following the resignation of CEO Carlos Tavares, and Chairman John Elkann is stepping up to steer the company through the turbulence. Known for his leadership across the Agnelli family’s vast automotive interests, including Ferrari and Fiat, Elkann is adopting a collaborative approach to stabilize the world’s fourth-largest carmaker.

Tavares, who had been CEO since the 2021 merger of PSA Group and Fiat Chrysler Automobiles, resigned on December 1, more than a year before his contract’s expiration. His departure reportedly stemmed from disagreements with Stellantis’ board and key shareholders over strategic direction.

Elkann, rather than assuming an interim CEO role as he did at Ferrari in 2020, opted to form an executive committee to manage the company during this transitional phase. This decision reflects his emphasis on collective leadership and leveraging the expertise of Stellantis’ top executives.

Rebuilding Bridges – 

One of Elkann’s immediate priorities has been mending relations with stakeholders, particularly dealers and governments, who had grown discontented with Stellantis’ centralized decision-making under Tavares. Complaints about high vehicle prices alienating cost-conscious customers became a recurring theme, especially in the U.S.

Elkann has taken tangible steps to address these concerns. He recently reinstated retired executive Tim Kuniskis to lead Ram, a crucial brand in Stellantis’ portfolio. Kuniskis is expected to revitalize the brand’s lagging sales, which had dropped 24% by the end of Q3 2024.

In Europe, Stellantis has rejoined the European Automobile Manufacturers’ Association (ACEA), reversing Tavares’ decision to exit the group. The move signals a shift toward a more cooperative stance on EU carbon reduction targets, which had been a contentious issue under Tavares.

A Collaborative Management Style – 

Elkann’s emphasis on teamwork extends to his interactions with dealers. In a December meeting with the Stellantis dealer council in the U.S., he reassured them of his commitment to addressing their concerns. Elkann has given Antonio Filosa, the newly appointed Chief Operations Officer (COO) of North American operations, greater autonomy to respond to local market conditions.

This decentralization marks a departure from the previous centralized management style and has been welcomed by dealers on both sides of the Atlantic. Italian dealership leaders have noted a more relaxed atmosphere in recent discussions, with promises of improved cooperation.

Stabilizing Investor Confidence – 

Elkann’s efforts to restore stability have also resonated with investors. Stellantis shares, which had dropped to a low not seen since mid-2022 following Tavares’ resignation, have rebounded by over 18%. Analysts attribute the recovery to Elkann’s pragmatic approach to addressing regulatory challenges and market realities.

Andrea Scauri, a Swiss-based fund manager at Lemanik, who rebuilt a small Stellantis stake last week, said the whole automotive industry will benefit from a softer EU approach on carbon emission rules, including on potential fines on 2025 intermediate targets. “Tavares denied this was a problem,” Scauri said. “Acknowledging there can be risks and having more constructive relations with politics, at a national and EU level, should help Stellantis.”

Looking Ahead – 

While Stellantis searches for a permanent CEO, Elkann’s focus remains on putting out fires left in the wake of Tavares’ departure. By empowering his executive team, repairing relationships with stakeholders, and fostering a culture of collaboration, Elkann is working to ensure that Stellantis emerges stronger from this challenging period.

Source: Reuters