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Industrials

Stellantis CEO: all our brands get a chance, China options open

(Reuters) - Stellantis, the carmaker forged from the merger of Fiat Chrysler and Peugeot-owner PSA, will give all its 14 brands a chance at success and keep all options on the table for revitalising its struggling Chinese business, it top executive said on Tuesday.

FILE PHOTO: Carlos Tavares, chief executive officer of PSA Group, speaks during the annual results news conference at their headquarters in Rueil-Malmaison, near Paris, France, February 26, 2020. REUTERS/Benoit Tessier/File Photo

In his first appearance at the helm of the sprawling group, Chief Executive Carlos Tavares said he was “very confident” of delivering its planned 5 billion euros ($6 billion) of synergies, including 80% within four years. But while he talked of cost cuts, he also committed not to cut jobs following the merger.

Tavares’ comments came as Stellantis shares surged more than 10% on their New York debut, mirroring strong increases in its French and Italian listed stocks since their launches on Monday.

The merger, completed on Saturday, has created the world’s fourth-biggest carmaker to help make the switch to the new era of electrification and automated driving.

“The purpose is not to be big, but to be great at what we do,” Tavares said, adding Stellantis would launch 10 new electrified vehicle models in 2021.

Tavares told reporters he had created a task force to find out “what went wrong” for both Fiat Chrysler (FCA) and PSA in China. They have both fared poorly in the world’s largest car market.

Tavares said the task force of Stellantis’ top five executives would work on solutions for a comeback there.

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When asked if that could include a new local partner, Tavares said the company “would not exclude anything”.

Ahead of the merger, PSA and FCA pledged not to close plants and Tavares said Stellantis’ ability to spread costs to invest in new vehicles would be a “shield” against job cuts.

However, he said Stellantis would likely decide in the next few weeks whether to make a fresh investment in Britain, and in its Ellesmere Port plant in particular, in an early test for both the carmaker and the Brexit trade deal.

Stellantis will have 14 brands, from FCA’s Fiat, Maserati and U.S.-focused Jeep, Dodge and Ram to PSA’s traditionally Europe-focused Peugeot, Citroen, Opel and DS.

Tavares, who was previously PSA’s CEO, said all 14 brands would be given the opportunity “to rebound” and invest in new products as the group focuses on profitable growth.

“All brands and all plants will be given a chance,” he said in an interview with German daily FAZ. “Of course, that doesn’t mean we don’t have to change things, we have to become smarter and more efficient.”

Tavares told Italian daily La Repubblica the aim was to reach full capacity at all the group’s production facilities.

“It will take time, but we can do so as we are able to work on a plurality of choices,” he said.

Writing by Nick Carey; Additional reporting by Tom Sims in Frankfurt and Giulia Segreti in Rome; Editing by Alison Williams, Mark Potter and Giles Elgood

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