New Stellantis CEO Antonio Filosa faces slew of challenges on day one

DETROIT — “Mediocrity will not be definitely worth the journey.”

That was a part of incoming Stellantis CEO Antonio Filosa’s first public message after being named to guide the worldwide automaker. It was a mantra many years within the making, as he spent 25 years climbing by means of the corporate’s ranks, ranging from a task as an evening shift paint store supervisor in Spain.

The quote additionally referenced late Fiat Chrysler CEO Sergio Marchionne, a mentor of Filosa’s who’s revered within the firm. Marchionne unexpectedly died in 2018, years earlier than the automaker merged to type Stellantis, the dad or mum for manufacturers corresponding to Jeep, Ram, Fiat and Chrysler.

A number of former and present Stellantis executives and staff who’ve labored with Filosa highlighted his connection to Marchionne when talking with CNBC. Additionally they described him as a fascinating, collective chief who is aware of the enterprise effectively, from the manufacturing unit flooring to C-suite places of work, however who faces a slew of challenges and exams forward.

As Filosa formally steps into the CEO position on Monday, he might want to channel Marchionne — considered as a dynamic government and thinker who saved Italian automaker Fiat and America’s Chrysler — to achieve success in turning across the embattled carmaker.

The newest CEO, Carlos Tavares, who spearheaded the merger to type Stellantis, abruptly resigned in December amid disagreements with the corporate’s board, yearslong gross sales declines and a 70% drop in internet revenue final 12 months. He, like Marchionne, was thought-about a dynamic CEO by these inside and outdoors the corporate, however many thought he targeted an excessive amount of on value cuts, to the detriment of the enterprise.

Along with monetary points, trade specialists stated Filosa might want to proceed to fix bonds with sellers, politicians and staff that had been broken throughout Tavares’ tenure. And he’ll need to deal with the corporate’s funding plans between conventional automobiles and “electrified” fashions corresponding to hybrids and EVs.

“We have to handle the transition, proper? It isn’t a secret that electrical automobiles shall be [a] robust a part of the long run, proper? Not just for Stellantis, however for the automotive trade itself,” Filosa, then-Stellantis’ head of the Americas, instructed reporters in January. “The tempo and the pace, most likely one thing that must be barely reassessed.”

Filosa, at the moment, stated it will likely be on the brand new CEO to resolve the tempo. He described the corporate’s points as “a multitask problem” for whoever the board would appoint, which finally was him.

Filosa, a comparatively younger CEO at 51 years outdated, has hit the bottom working since Tavares promoted him from Jeep’s CEO to chief working officer of Stellantis’ Americas operations, the place he prioritized mending strained bonds.

Staff had been distraught over cuts and layoffs, whereas the corporate’s franchised retailers had been furious about Stellantis’ gross sales and market share losses below Tavares. The Stellantis Nationwide Dealership council in September penned an unprecedented open letter condemning Tavares’ actions.

“Your individual distribution community, your supplier physique, has been left in an anemic and diminished state,” Kevin Farrish, a supplier in Virginia who led the council, wrote within the letter.

Michael Bettenhausen, a supplier in Illinois who succeeded Farrish, has spoken fondly of Filosa however stated there’s nonetheless quite a lot of work to get accomplished.

 “We have to mutually work collectively and dive into all the problems right here within the North American operations, and we look ahead to Antonio nonetheless being part of these discussions,” he stated.

Stellantis’ world gross sales below Tavares fell 12.3% from 6.5 million in 2021 — the 12 months the corporate was shaped — to five.7 million in 2024. That included a roughly 27% collapse within the U.S. in that interval to 1.3 million automobiles offered. The automaker dropped from fourth is U.S. gross sales to sixth, falling from an 11.6% market share to eight% throughout that timeframe.

Filosa — a local of Naples, Italy — stated in January the highest precedence for the U.S. was to develop retail market share, which incorporates gross sales to prospects versus these to fleets or companies.

“We have to do this. It isn’t a perception; it is a want,” he stated. “The U.S. retail market share actually measures your capacity to organically [grow sales].”

The automaker stays in a product dearth, bringing its total gross sales down roughly 12% in the course of the first quarter of this 12 months in contrast with the identical interval a 12 months earlier. The corporate declined to launch its year-to-date retail gross sales.

However new merchandise such because the upcoming redesigned Jeep Cherokee, further Ram 1500 pickup truck fashions and a brand new gas-powered Dodge Charger are anticipated to spice up gross sales, in addition to the automaker’s high line.

Stellantis’ income has grown for the reason that firm was shaped however plummeted 17.2% year-over-year in 2024 to 156.9 billion euros ($180.6 billion), whereas different automakers corresponding to Common Motors and Ford Motor noticed notable will increase of their high traces.

“Filosa steps into the CEO position amid important challenges for the corporate,” RBC Capital Markets analyst Tom Narayan wrote in a Could 28 investor observe. “His instant priorities embrace revitalizing the corporate’s efficiency within the US market, streamlining Stellantis’ intensive 14-brand portfolio, and mending strained relationships with sellers, unions, and governments.”

Filosa’s appointment to CEO was considered as a protected, “logical selection” for the automaker because it makes an attempt to deal with its self-inflicted points, in addition to regulatory uncertainty corresponding to tariffs and world financial considerations, based on trade insiders and observers.

“I believe it is a logical, credible selection,” Tavares instructed Bloomberg in late Could in his first interview with worldwide media since leaving the corporate. “Hopefully, he shall be correctly supported by the board. So let’s have a look at.”

Since being introduced as CEO on Could 28, Filosa has visited lots of the automaker’s crops within the U.S., Canada and Europe. He was reportedly chosen following a six-month search that included different inner and exterior candidates.

His public feedback relating to his new place have painted him as a humbled, grateful government and father who takes pleasure in connecting with folks.

“I’m really honored to be appointed CEO of this nice firm, Stellantis. It has been my house for 25 years. This place is in my blood,” he stated a Could 28 LinkedIn publish, referencing Marchionne.

A handful of present and former Stellantis executives described Filosa as an “partaking chief” and “listener” who’s significantly comfortable inside crops and talking with staff — very like Marchionne.

“I’ve labored side-by-side with him. … We grew up below Sergio,” Stellantis world head of design Ralph Gilles instructed CNBC. “He is a folks particular person. He is a visionary, he is energized, he is younger … and he is curious. He is a terrific listener. I really like his problem-solving talents, and for me, he loves design.”

Marchionne would consult with his executives as “youngsters,” a lot of whom, like Gilles and Filosa, he appointed to their first high-profile management positions. Others nonetheless with Stellantis embrace Ram CEO Tim Kuniskis and Chief Advertising and marketing Officer Olivier Francois.

“Antonio’s superior,” Kuniskis, who unretired after a seven-month hiatus final 12 months, instructed CNBC. “He is one of many driving forces for me wanting to come back again.”

Stellantis CFO Douglas Ostermann earlier this month touted Filosa’s background in manufacturing and constructing the corporate’s Latin American enterprise, which has remained a excessive profitability area for the corporate.

“He is a really sort of open chief that I believe actually works effectively with throughout the group, throughout folks, throughout manufacturers, sort of a relationship builder,” Ostermann stated throughout a Bernstein occasion.

Upon Filosa’s appointment, Bernstein analysts in an investor observe described him as a “protected pair of palms” however a comparatively uninspiring selection for traders in contrast with an out of doors rent corresponding to ex-Apple CFO Luca Maestri, whom the corporate was reportedly contemplating.

“I believe traders had been fairly excited in regards to the prospect of bringing in anyone from the surface,” Bernstein analyst Daniel Roeska instructed CNBC. “Not that there wasn’t anyone inside, however after sort of such a giant combine up, traders thought the concept of bringing one thing from the surface was a great one.”

Filosa hasn’t had a lot expertise in such a high-profile position, in contrast to Marchionne and Tavares, who had been battle-tested automotive veterans. He got here up by means of the corporate’s Latin American operations and has solely served a short while in North America — its most vital market. Whereas Italian, he additionally has restricted work time in Europe, the automaker’s second most essential area.

Two sources who agreed to talk on the situation on anonymity to have the ability to communicate freely additionally stated he is a nostril to the grindstone chief who will be demanding at instances, much like his predecessors and different CEOs.

Filosa additionally might want to restore investor confidence, which each Marchionne and Tavares had been comfortable doing. Three sources, together with two firm insiders, stated he does not but have the CEO prowess like his predecessors, one thing which will include expertise.

UBS analyst Patrick Hummel famous in a monetary observe final month that Filosa’s interplay with the monetary neighborhood additionally has been “restricted” to a capital markets day in June 2024.

Buyers did not react strongly to the CEO selection, based mostly on the corporate’s inventory worth. When Filosa was introduced as CEO on Could 28, U.S.-listed shares of the inventory declined 3.2%. Since then, shares are off roughly 10% amid a litany of out of doors elements.

The each day inventory decline is definitely much like when Marchionne made his “mediocrity” feedback in the course of the firm’s first investor day after combining Chrysler and Fiat to make “Fiat Chrysler Vehicles,” or FCA, on Could 6, 2014. Shares fell 3.9% that day.

Marchionne, a philosophy main who was identified for his astute remarks, was discussing the challenges forward for the automaker and altering automotive trade, together with not chasing unprofitable companies — which Filosa and Stellantis should proceed to deal with.

“I instructed you this morning that our FCA tradition responds higher when it’s confronted with objective and with problem,” Marchionne stated. “And our plan has objective as a result of when all is alleged and all is finished, mediocrity will not be definitely worth the journey.”