The 4th-largest automaker faces massive problems

It’s May 7th, 1998 and one company is about to make history. Daimler-Benz is dishing out $36 billion in stock options to buy Chrysler.

This merger is one of the biggest in automotive history, and the potential is huge.

Instead, it’s considered one of the biggest disappointments and a precursor to the identity crisis that would revamp the US automaker world forever.

Key Takeaways

Don’t have much time? Here’s the summary of what we’re talking about:

• We talk about the fourth-biggest automaker in the world and how some of its moves are contradictory. It may promise electrification by 2030, but the goal seems farther away every day.

• We bring you the Jeep models you should avoid and why.

• Let’s dive into changing your air filter, one of the easiest tasks you can do at home!
  

KERN’S CORNER

The most enigmatic automaker of all

Here's a quick exercise: name the top five automakers in the world. 

Many of you will come up with answers such as Toyota, VW, Hyundai-Kia, and GM. You'd be right. These make up the top five, but I bet you’re missing one. 

Here are some hints: 

• It's been in the news lately. 

• It has produced some of the best and worst cars in recent decades. 

• It's an enigma.

We’re talking about Stellantis; in 2023, it was the fourth-largest automaker in the world.

Ranking 4th in the world is an accomplishment, but that's not the only big accomplishment. It has landed the largest rental car deal in Europe, totaling 250,000 vehicles. 

It's not all great news. Last week, we wrote about how it killed off several iconic vehicles. You can read the article here. 

So, why can't we think of the Stellantis name right away?

Plus, why has it been on the news lately?

Well, the brand is an enigma of inconsistency and strange management decisions.

The Stellantis way: back and forth, back and forth

When Carlos Tavares took over as Stellantis' CEO in 2021, his goal was clear: dare to move forward. That was their plan's name. 

Its biggest goals were electrification, brand optimization, and carbon footprint reduction. You can read all about it here. 

He also warned Chrysler and Dodge: reinvent yourself or die. Of course, Stellantis couldn't afford to cross off one of America's most iconic brands, so they went down the EV path. 

We know what Dodge will bring to the table with the electric Charger. Plus, Chrysler just announced that the replacement for the 300C, the Airflow, will enter production in 2024. 

The company's objective seemed clear from the outside: electrification was the way of the future.

As we mentioned before, this even meant sacrificing the famous 392 engine. So, we bid farewell to all the vehicles sporting this engine. 

That's what we perceive from the outside, but there's a big problem. Why don’t we know more about Stellantis?

We identify some of the conglomerate's individual brands: Jeep, Dodge, Chrysler, Fiat, Peugeot, and Citroën.

When we think of these brands, the term "best sellers" doesn't come to mind. The company's stock proved this days ago as its stock to a big hit. 

You can read about how the EV market and foreign exchange harmed the company. 

We've mentioned it before: no one is buying EVs. This harms automakers and their plans for electrification. 

So, what did Stellantis do? It went back to the internal combustion engine—well, sort of. 

Adjusting for the future might mean looking into the past.

A few years ago, Stellantis had a clear goal. Now, it's anything but. 

Slow sales and a stagnant Dare Forward 2030 plan (which sounds like a presidential campaign, if you ask me) forced the company to change. Now, it's promising some flexibility. 

If, and only if, demand was high, the company would be willing to put ICE engines in its vehicles.

The company even produced many platforms to fit electric and combustion powertrains. This raises many questions.  

As this article says, what happens if everyone wants a Stellantis product with an ICE? 

Does the company ditch all its EVs? 

Plus, will those products be any good? 

I want them to replicate a Trackhawk somehow. Yet, an electric Trackhawk doesn’t sound appealing.

A bit more contradiction

Then, there's the whole rally thing.

While it might not be the most popular motorsport in the US, rallying is massive in Europe, Asia, and Latin America. Dominate the rally circuits; you have a great marketing hook, which means more sales. 

That was Peugeot and Citroën's story for years. Citroen claimed title after title after title. Following a close second was Peugeot. 

Now, the brands are nowhere to be seen in the sport. There were rumors of Lancia returning to the rally stage, but this comment by the motorsport chief is clear on their stance.  

So, the brand is undoubtedly going to lose traction in the US unless they come out with a banger, and that's unlikely. Plus, it's not doing much in other markets except Europe.

Sales are dropping, and the CEO acts like he doesn't care. 

Before we discuss why Carlos Tavares enraged the French president, check out this video from Donut. It's a great one-man rant on Chrysler's toxic relationship with its parent company.

More money, more problems 

Or, less money, more problems?

Stellantis is going through a dire financial situation. So, it took drastic budget-cutting decisions. The second most noticeable one is ditching American engineers. 

Competition is rough, and Stellantis won't hire American engineers for $150,000 annually, to stay alive. 

Instead, it's moving its staff to countries such as Brazil and India, where good engineer earns $50,000 to $60,000.

What will be the impact on quality? We'll see in a few years, but another company known for quality issues, Tesla, went down the same path. 

I called this the second most noticeable because the first one is big. It's an elephant in the room that few can avoid. 

It's a $37-million elephant.

That's how much Carlos Tavares will get. So, despite all this chaos in the brand, the CEO landed $37 million for his performance. This isn't the only time that Tavares' payout has caused controversy. 

In the 2022 French elections, President Emmanuel Macron and opposition candidate Marine Le-Penn called Tavares' payout shocking. It was about $20.5 million at the time, plus around $39 million in bonuses. 

You really have to screw it up when opposing parties agree that you're greedy. 

But that's the Stellantis way. 

It's a company filled with contradiction. 

Most of its brands aren't available in the US, but the company chose to stop producing the few that appealed to the US. 

The Cherokee, Wrangler, Charger, Challenger, and 300C were part of the American automotive identity, but they're not the same anymore. 

Moreover, the US market is essential for Stellantis.  

Replacements are coming, but I wonder if they'd be any good. But then again, I'm always up for being proven wrong.

Meanwhile, let’s discuss one of my favorite Dodge products: the Durango.

Read this article to learn which are the best and worst Dodge Durango years!

BEST AND WORST

Which Jeep models should you avoid?

Speaking of Stellantis, Jeep is one of its most renowned brands, but it doesn't mean all its models are perfect. 

Usually, we do a best-and-worst list. This time, it's easier to make a list of the Jeep models you should avoid.

TIPS AND KNOW-HOW

How to change your car’s air filter

Your car's air filter is crucial; having the right one can make or break its performance. Yet, it's also one of the components that most people often overlook. 

Fortunately, it's an easy job you can tackle in one afternoon. This article will examine all the details you must consider when changing your air filter.

NEWSBITES

Every week, we scour the web for the most essential news. Here’s what you need to know this week:

• I'm not too sure about this one, but apparently, if you like loud cars, you could be a psychopath.

• A valet driver stole a Dodge Challenger, and it ended just how you expected. 

• Volkswagen is struggling to convince investors it's still a good brand.