Finding A CEO For Chrysler Dodge Jeep Ram Parent Company Sure Sounds Like It Was A Pain

I was excited to read a long feature this morning on the ongoing drama at Stellantis. It’s well-reported, though much of it is a reheat of the tea we’ve already sipped. Buried in the ongoing travails of the Elkann clan (the El-clann, is that a thing? Can I make that a thing?) was some insight into how the parent company of Chrysler, Dodge, Jeep, Ram, Alfa Romeo, Kurts, Maserati, and a bunch of other brands ended up with an internal hire for its new CEO.

The job of Stellantis CEO is described in the piece as being “a sort of United Nations ambassadorship,” so The Morning Dump is going to go global today. First, there’s Mexico. It’s been courting Chinese investment and products, but you gotta dance with them that brung ya, so Mexico seems willing to trade a favorable trade relationship with the Asian nation in exchange for consideration from the United States. Will a 50% tariff be enough to keep Chinese automakers out? Probably not! The cars are just that cheap.

Trade norms between Asia and North America were shattered last week with a raid on a Hyundai-LG plant that was under construction in Georgia. President Trump invited those people he’d previously handcuffed to stay. Can you guess how many did?

‘Outside Talent Wasn’t Exactly Clamoring For The Job’ Says New Report

The ouster of Stellantis CEO Carlos Tavares was not surprising, especially if you’d been paying the least bit of attention to what Stellantis was doing under his watch. While the onset of the pandemic allowed Tavares to print cash for a short period of time by jacking up prices, the direction of the company was nonsensical. In no particular order, here are some of the things for which he’s been criticized:

• Moved some engineering from Italy and the United States to Brazil/India
• Got in a fight with the Italian government for no good reason
• Invested a bunch of money in electric platforms at the expense of everything else
• Killed the hemi
• Filled management with French folks
• Made the dealers mad at him
• Underinvested in Jeep products, focusing instead on the Wagoneer and EV Wagoneer S

That last sin is the focus of the large Bloomberg Businessweek feature on “The Corporate Saga Behind Jeep’s Collapse.” It’s a great read if you haven’t closely followed the issue, but I’m assuming most of you have, so I’m just going to pick out a couple of things that felt new.

First, there’s the implication that the appointment of Antonio Filosa was maybe at least partially a sign that no one else wanted the job:

Filosa’s profile had risen amid an exodus of senior management under Tavares; only seven months earlier he’d been promoted to run the North American operations. But in many ways, anointing him as CEO was a tacit admission of what no one was willing to say aloud: Outside talent wasn’t exactly clamoring for this job.

Who else was being considered? According to the report, Elkann looked in some fairly obvious places:

He’d sounded out José Muñoz, who in November was promoted to become Hyundai Motor Co.’s first non-Korean chief. He considered Mark Reuss, Mary Barra’s No. 2 at GM, and former Fiat Chrysler CEO Manley, who’d gone on to successfully lead the US dealership chain AutoNation Inc. Elkann also was in contact with Luca de Meo, a former Fiat executive who’d executed an impressive turnaround of Renault SA. But by then, de Meo was already lining up a new job outside autos as CEO of Kering SA, the French luxury group that owns Gucci. (A Stellantis spokesperson in an email disputed this characterization, saying “the Board had a number of strong candidates ready to take up the CEO role at the end of the process, both external and internal.”)

I assume the conversation with everyone was something like “Hey, would you like to blow up your sweet gig by coming to Stellantis so you can get yelled at by the French and Italian governments, while also maybe being the 19th person blamed for the death of Jeep?”

That’s a tough sell.

So far, I think Filosa has done a good job, and I’m low-key optimistic about how he’ll do in the job, if only because of this little aside:

Days before Tavares was ousted, Filosa—who speaks fluent Portuguese as well as English and Italian—made a not-so-subtle jab at the soon to be former regime. “Speak whatever language you want—just not French!” he joked to a Bloomberg reporter last November. (He declined to comment for this article.)

Ok, Team Filosa. That’s hilarious.

Mexico Puts A 50% Tariff On Chinese Cars

It’s clear that Mexico benefited greatly from the North American Free Trade Agreement, which shifted a lot of automotive production south of the border. A revision came in the form of the United States Mexico Canada Agreement (USMCA), which still made it possible for automakers to keep production in Mexico.

Given the desire from the second Trump Administration to move production back, Mexico is in a precarious position. On the one hand, Chinese companies like BYD have looked to Mexico as a potential industrial base on this side of the Pacific. On the other hand, this idea freaked out everyone north of the border so badly that Mexico had to quietly back away from supporting Chinese plants in its country.

Now Mexico is getting louder, with an increase in tariffs from 20% to 50%.

Per Reuters:

Mexico will raise its tariffs on automobiles from China and other Asian countries to 50 percent from a prior level of 20 percent, Economy Minister Marcelo Ebrard said.

“They already have tariffs,” Ebrard told reporters on Sept. 10 when asked about the import levies on China. “What we will do is raise them to the maximum level allowed.”

“Without a certain level of protection, you almost can’t compete,” he added.

[…]

The move comes as President Donald Trump pushes countries in Latin America to limit their economic ties with China, with which it competes for influence in the region.

I think the Mexican government has done about as well as anyone in placating the Trump Administration.

China Can Probably Afford The Tariffs

While the Chinese government seems a bit miffed by what’s happening, the reality is that Chinese cars are already so much cheaper to produce and import that they’re likely to still be competitive. For example, the cheapest legacy OEM EV in the country is the Equinox, which costs about 876,000 pesos, compared to 399,800 pesos for the BYD Dolphin.

The Equinox is a bigger and much better car, but affordability is still an issue. Plus, China is already well integrated into the country, as Bloomberg reports:

Michael Dunne, chief executive of Dunne Insights and a former president of General Motors Indonesia, said higher tariffs on Chinese imports will slow the flood, but not stop it.

“There are already several hundred thousand Chinese cars running on Mexican roads and scores of Chinese car dealerships,” he said. “That Chinese beachhead doesn’t just vanish.”

This will be interesting to watch.

Only One South Korean Worker Wanted To Stay

I had a long story about the raid on the Hyundai plant earlier this week, so I’m not going to go into too many details. Most of the workers are heading back to South Korea, though they were reportedly invited to stay:

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President Donald Trump offered to allow hundreds of South Korean workers arrested at a Hyundai-LG battery plant during an immigration raid to stay in the U.S., but only one has opted to remain, South Korean officials said.

Trump’s overture sought to encourage the workers to stay and train Americans, according to the officials. It resulted in a one-day delay to the departure of a chartered plane to bring the workers home.

The plane is now scheduled to leave the U.S. later in the day. TV footage showed the workers boarding buses outside the barbed-wire clad fences of a detention center at around 2 a.m. on Sept. 11 to go to Atlanta airport.

Unlike other U.S. deportations, they were not handcuffed – satisfying a key demand from South Korea, which has been horrified by the raid, particularly by the use of armored vehicles and shackles.

South Korea still seems big mad about this, which is clear from this Nikkei Asia article:

Moon Young-ju could not contain his anger when he heard the news that over 300 South Koreans had been detained after U.S. immigration authorities last week raided a joint Hyundai Motor-LG Energy Solution battery factory under construction in the state of Georgia.

The 54-year-old former merchant protested in front of the U.S. Embassy in downtown Seoul on Wednesday with a yellow banner reading: “Yankees go home. Get out america army.”

“I came here because I was so upset,” Moon said after lighting a cigarette. “We invested as they demanded. We built factories as they demanded. It’s our blood, sweat and tears.”

What I’m Listening To While Writing TMD

I absolutely adore Self Esteem, and her video for “The Curse” only confirms this feeling for me. There are a lot of great artists coming out of the UK, from the Howitzer-voiced Adele to up-and-comer Lola Young. What I love about Self Esteem is that she always seems to be in conversation with herself, as opposed to other people.

The Big Question

Is there any car company you’d like to be CEO of?

Top photo: Stellantis