ROME — Italian lawmakers on Friday questioned the head of Stellantis, the world’s fourth-largest carmaker, about the group’s strategy, a day after it announced reshuffling management in order to revive sales.
Stellantis, which makes Jeep and Chrysler vehicles, is struggling globally as the Italian government demands clarity about its manufacturing plans in the country. It also faces a national strike by metal workers called by Italy’s main unions for October 18, with a mass demonstration expected in Rome.
The group came under fire after a regarding profit warning in which the company said it expects to end the year with negative cash flow of up to 10 billion euros ($11.2 billion).
Speaking to a parliamentary committee on Friday, Stellantis CEO Carlos Tavares stressed that the European Union’s carbon emissions rules are imposing 40% higher costs on the struggling car industry.
He added that European customers are reluctant to buy expensive electric cars, while Chinese competitors can use the added value advantage.
Tavares, whose leadership has recently come under scrutiny, said the sector is under pressure from the constant change in technology. “It can be alarming, especially if it’s fast and deep… But we at Stellantis have a very clear road map to drive this change,” he said.
Tavares has also been criticized by American dealers United trade union of workers of the automobile industry after a terrible financial performance this year, caught off guard by too many expensive cars on dealer lots. He tried to cut costs by delaying the opening of factories, dismissal union workers and offering a ransom salaried employees.
Italian lawmakers have called attention to a significant reduction in car production in Italy, which threatens the country’s once-thriving auto industry.
Stellantis, which was created in 2021 from the merger of Fiat-Chrysler and PSA Peugeot, reported a sharp drop in production at most of its Italian plants in the first half of 2024. The carmaker has cut production in Italy over the past 17 years. by almost 70%.
Lawmakers have invited Tavares to explain how he intends to stop the decline of Italy’s auto industry.
“The cost of energy here is very high,” he said. “It’s twice as much as in Spain, and it’s a significant shortcoming,” he said, calling on political leaders to provide answers on how to manage the cost increase.
Calling for more government incentives for the struggling electric vehicle sector, Tavares said: “We’re not asking for money for ourselves, we’re asking you to help your citizens so they can buy cars they can afford.”
However, several parliamentarians — mostly from the center-left opposition — called Tavares’ hearing “disappointing.”
Giuseppe Conte, the leader of the 5 Star party, pointed out that Stellantis CEO “has not said anything about the future of our plants, nothing concrete about investment in research, technology and development.”
Meanwhile, Democratic leader Ellie Schlein said her party would support the auto plant strike.
“We ask Stellantis to discuss this with the unions and workers. They cannot bear the costs of what is happening,” she said.
In the latest management shake-up announced on Thursday, Stellantis Chief Financial Officer Natalie Knight will be replaced by Doug Osterman, the company’s chief operating officer in China. Stellantis also appointed new chief operating officers in North America and Europe.
In September, the group announced that it was looking for a the successor for Tavares, 66, as part of a planned management change. Tavares’ five-year deal was a little more than a year after it expired in 2026, but the company hinted at the time that it was possible he could stick around beyond that.
