### Stellantis Faces Falling Sales and Worker Layoffs Amid Strategic Missteps

The Jeep Gladiator, Jeep's first pickup model in over 25 years, generated much excitement when it was introduced by Fiat Chrysler in 2018. Initially, its rollout seemed promising, with US sales doubling to nearly 90,000 units in 2020, despite pandemic-related production challenges. However, Jeep's fortunes have since shifted dramatically.

Following Fiat Chrysler's merger with PSA Group to form Stellantis in early 2021, the company pivoted towards producing higher-priced, higher-margin vehicles, focusing scarce resources such as computer chips on more expensive models. This strategy left many traditional Jeep and Fiat Chrysler customers disenchanted. A search of Jeep's website reveals that very few Gladiators are priced below $40,000, with some even reaching up to $72,000. This pricing strategy has contributed to a steady decline in Gladiator sales, which are down another 21% this year alone. Jeep's overall sales have plummeted 36% compared to pre-pandemic levels, as Stellantis' strategy of raising prices and reorganizing its lineup misfired.

Stellantis' struggles extend beyond Jeep. The Ram truck brand is also finding it hard to compete with General Motors and Ford, while Dodge has cut models ahead of releasing electric versions. Chrysler, once a cornerstone brand, currently produces only the Pacifica minivan, a segment witnessing weak demand. In another blow, Stellantis announced layoffs for about 1,100 workers at its Toledo Assembly Complex South plant, which assembles the Gladiator, and another 1,200 at its Warren, Michigan truck plant due to discontinuing the entry-level Ram 1500 Classic pickup.

The issues at Stellantis are reflected in its sales data; almost every Stellantis model has seen double-digit year-over-year sales declines, leaving dealer lots overflowing with unsold inventory. By the fourth quarter of 2023, the average Stellantis vehicle was priced at $58,000 in the US, the highest in the industry according to Edmunds. Though this average fell slightly to just under $55,000 in the third quarter, it remains the second highest, trailing only Ford and its luxury brand, Lincoln.

Jessica Caldwell from Edmunds notes that typical Stellantis buyers, usually with lower credit scores, are now unable to afford these higher prices, creating a mismatch between product and market. Charlie Chesbrough of Cox Automotive echoes this sentiment, asserting that Stellantis has priced out its traditional customer base.

Earlier this year, Kevin Farris, head of the Stellantis National Dealer Council, penned an urgent open letter to CEO Carlos Tavares, warning that the company's relentless focus on short-term profits had catastrophic repercussions. Market share had nearly halved, the share price was falling, plants were closing, and key executives were leaving the company.

Despite Stellantis issuing a statement rejecting Farris' accusations and claiming improvements in sales towards the end of the third quarter, the unrest persists. The United Auto Workers union is contemplating a new strike, accusing Stellantis of not fulfilling contract agreements, accusations which Stellantis denies.

Farris still believes that recent executive changes are steps in the right direction but insists that job cuts and reduced production are not viable solutions to Stellantis' challenges. Specifically regarding the Gladiator, he suggested that its SUV-like design and high price were limiting its market appeal and proposed that a smaller pickup for the Ram brand could better compete in the mass market.

Stellantis stands at a crossroads, its top-down strategy of prioritizing short-term gains appearing to lose ground. As the company navigates through these troubled waters, the implications for its brands, dealers, workers, and loyal customers remain profound.