Too Many US-Built Vehicles Need Fixing Straight Off The Line, Stellantis CEO Says

Production Line Quality Issues Slowing Deliveries and Increasing Costs

Stellantis CEO Carlos Tavares expressed frustration with production-line quality issues that are causing delays in delivering US-built vehicles and adding unnecessary costs to the company. Tavares highlighted the need for immediate fixes on models like the RAM 1500 as soon as they come off the production line, which not only slows down delivery times but also leads to increased production costs. He also emphasized the potential for creating additional quality issues when repairs are made outside of the main line.

Financial Impact and Plans for Improvement

Stellantis recently reported a 48% decline in profits during the first half of 2024, primarily attributed to underperformance in the US market. Tavares acknowledged the need for improvement in the direct run rate of their plants, particularly at the Sterling Heights facility where the RAM 1500 is produced. He emphasized the importance of working with the plant management team to address these issues and enhance production efficiency.

Possible Solutions and Future Direction

Tavares indicated that price cuts could be considered but would need to be accompanied by cost reductions. He also warned that brands within Stellantis that are not profitable may face closure. The company aims to optimize its operations and ensure that all brands contribute to its overall financial success.

Overall, Stellantis is determined to address the quality issues affecting its US-built vehicles and streamline its production processes to enhance efficiency and profitability.