Jeep Owner Stellantis Ready To Ditch Cherokee Name, CEO Says

When asked in an interview if he would be willing to change the name of the Jeep Cherokee if he was pressured to do so, Mr Tavares said, “We are ready to go anytime, up to to the point where we decide with the appropriate people and without intermediaries. “

“At this point, I don’t know if there is a real problem. But if there is one, well of course we will solve it, ”Tavares said, adding that he was not personally involved in the talks.

The Cherokee name debate is among the issues facing Mr Tavares, who took control of Stellantis when it was founded earlier this year following the merger of Fiat Chrysler Automobiles NV and manufacturer Peugeot PSA. In Wednesday’s interview, Mr Tavares also discussed whether to downsize the company’s 14 brands, making Fiat factories more competitive, and his intention to stay with China.

The Cherokee Nation is the largest Native American tribe in the United States, with some 370,000 members, and Jeep has sold millions of vehicles bearing its name. The car brand extended its use of the Cherokee name to a compact SUV, a smaller version of the Grand Cherokee, in 2013.

The Chief of the Cherokee Nation recently said he would like to see Jeep stop using his tribe’s name on his SUVs. Chuck Hoskin Jr., Chief Chief of the Cherokee Nation, said he believed Jeep had good intentions but that “it does not honor us to have our name written on the side of a car,” a statement said. first published in Car et Chauffeur last week.

“The Cherokee Nation has an open dialogue with the leadership of Stellantis and looks forward to the ongoing discussions,” a spokesperson for the tribe said Wednesday. “We appreciate the collaboration and thoughtful approach of Stellantis on this matter.”

Mr Tavares’ remarks follow a wide toll of racial and social injustice in the United States that was sparked by the police murder of George Floyd, an unarmed black man, in Minneapolis over the weekend of Memorial Day last year. In December, the Cleveland Indians decided to drop the baseball team’s long-held nickname after fans and Native American groups criticized it as racist. The Washington NFL football team dropped a name that had been viewed as a racial insult.

The Jeep Cherokee and Grand Cherokee SUVs are among the brand’s bestsellers in the United States, accounting for 43% of Jeep’s sales in its largest market, according to company figures. Stellantis is rolling out a long-awaited Grand Cherokee redesign later this year.

Mr Tavares said the auto industry’s practice of naming cars after Native American tribes was a sign of respect.

“I don’t see anything negative here. I think it’s just about expressing our creative passion, our artistic abilities, ”Mr. Tavares said.

The Jeep brand rubs shoulders with profit engines like Ram in the United States and Peugeot in Europe. But the company’s extensive portfolio of 14 brands also includes some that will need to prove their worth, Tavares said.

Mr Tavares said he has asked each of his brand managers to work on a 10-year plan to develop greater long-term visibility into product planning.

“I said, ‘Listen guys, I’m going to give you a chance. You have to convince me – you, the CEO of the brand – that you have a vision, ”Mr. Tavares said.

After several turnaround efforts, Fiat Chrysler’s Alfa Romeo and Maserati brands have failed to make a significant comeback in recent years. The Fiat brand is struggling with aging models and low sales, which has caused an overcapacity problem at the company’s Italian factories.

Even the famous Chrysler brand has declined in recent years, selling only three models compared to six ten years ago. The brand’s sales in the United States also slipped to a third of their volume in 2015, according to company figures.

On the PSA side, the DS brand – which focuses on premium sedans and SUVs – increased its market share last year, but remains far behind some of its German rivals.

“Once we’ve given them a chance to fail, we also need to be fair,” said Tavares. “If the rest of the business is doing the right things and there’s one part of the business that is pulling everyone down, we’ll have to take that into account.”

The Portuguese leader has built his reputation in the automotive industry as a turnaround expert. Peugeot was bleeding money by hiring Mr Tavares in 2013. Since then, the French automaker has grown from € 5 billion, or around $ 6 billion, in 2012 to become one of the mass automakers the most profitable in the industry. . Last year, it made a net profit of 2.17 billion euros, or about 2.62 billion dollars, with an adjusted operating margin of 7.1% in its core automotive business.

This time around, Tavares has a longer to-do list, including integrating the two companies’ European operations and reducing losses in China.

In Europe, Mr Tavares visited Fiat Chrysler factories – including an Alfa Romeo factory 80 miles south of Rome – and encouraged them to compare their performance to PSA factories. Additionally, employees from Fiat Chrysler’s Fiat plant in Mirafiori, Italy visited PSA’s Citroën plant in Madrid, and Mr. Tavares said he was surprised at the non-labor cost savings they had. observed.

The auto executive said the new company could meet its cost-cutting targets in Europe without closing factories.

Asked about the lessons he learned from the chip shortage that has slowed auto factories across the world, Mr Tavares said major suppliers were not relaying the signals they were receiving about the looming crisis. “We were not protected,” he said. “It’s a clear lesson learned.”

Mr Tavares said the industry-wide switch to electrification will continue to depend on government subsidies and other financial incentives for buyers until automakers figure out how to reduce production costs. over the next few years.

“If we have extremely efficient electric vehicles but no one can buy because they are expensive, what’s the point from an environmental point of view?” he said.

In China, the combined sales of Peugeot and Fiat Chrysler accounted for less than 1% of a market that sold 20 million vehicles last year, according to industry data. Fiat Chrysler has long struggled to make a profit in the world’s largest auto market, while the French automaker sold just 45,965 vehicles in China last year, continuing a rapid decline over several years.

Mr Tavares said Stellantis has no plans to leave China, removing an option he said was still on the table when the company started operations in New York earlier this year.

“We cannot be far from the biggest market in the world,” he said.

Write to Nick Kostov at [email protected] and Nora Naughton at [email protected]