Good morning! It’s Monday, December 16, 2024, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. Here are the important stories you need to know.
1st Gear: Stellantis Will ‘Fix What Tavares Harmed’
From the outside, it looks as if Stellantis is in turmoil right now with sales plummeting, dealerships calling out management for poor handling of the Jeep owner and company boss Carlos Tavares leaving suddenly. Now, the company is doing everything it can to save face while dismantling the work of the departed CEO.
Stellantis has begun appointing new executives across its leadership team and reinstated some figures who left under Tavares, reports Business Insider. The moves are all part of a massive effort to turn around the company, which is being led by Stellantis and Ferrari chair John Elkann:
The mood inside Stellantis’s North American division has changed dramatically since former CEO Carlos Tavares unexpectedly stepped down on December 1.
Dealers and employees of the struggling Jeep owner who spoke with Business Insider say they and many of their peers feel optimistic about how the company has handled these first two weeks.
They point to quick and sweeping changes made by Chairman John Elkann and his advisory committee, who have vowed to rebuild trust with key stakeholders.
The changes undo work carried out by Tavares, including re-joining European auto lobby group ACEA, which the departed CEO left in 2023. The company will also work to realign itself with consumers, who Automotive News reports have been “alienated” by price hikes implemented in an effort to boost company margins.
Stellantis will also work to patch up its relationships with dealers across the U.S. and Europe, adds Automotive News. Dealers in the U.S. have been increasingly vocal about the mistakes they thought Tavares was making when he was in charge. Elkann now plans to fix that relationship next:
Kevin Farrish, leader of Stellantis’ dealer council, said Elkann met with their executive board in the U.S. in early December to discuss how the automaker could repair its relationship with the dealers.
Elkann said Antonio Filosa, appointed chief of North American operations in October, would have the authority to respond to market conditions, Farrish said.
“It meant a great deal to us,” he said in a message. “We have a ton of opportunities to fix what Mr. Tavares harmed.”
With all these changes afoot, you’d be forgiven for thinking that Elkann was ready to take control of the Fiat and Jeep owner. That’s not the case, though, and the chairman is working with other senior executives at Stellantis to find a new CEO to lead the automaker. Automotive News adds that Stellantis hopes to announce its new CEO in the first half of 2025.
2nd Gear: Elon Musk Is Still Defending His Massive Pay Check
If you thought that a judge’s ruling against Elon Musk’s enormous pay package at Tesla meant that the issue was closed for the year, you’d be wrong. After the Delaware court blocked Musk’s payout once again, another judge has now ruled that the Tesla boss can appeal the decision over his $56 billion pay package.
Delaware judge Kathaleen McCormick rejected Musk’s enormous pay package for a second time on December 2 after Tesla provided testimonies and data that backed up the payout, reports Automotive News. Now, a 30-day window has opened for Tesla and Musk to appeal the decision and attempt to reinstate the payout for a second time:
Musk and the board that approved the 2018 pay package can appeal McCormick’s ruling in January that they had breached their fiduciary duty to investors by approving a compensation plan she described as “unfathomable” in its size.
On Dec. 2, she declined to reconsider that ruling despite a June vote by Tesla shareholders in favor of the package.
Tesla will also be able to appeal McCormick’s order directing the company to pay $345 million to the attorneys who represented Richard Tornetta, the shareholder who sued in 2018 to rescind the pay package.
While Tesla and Musk will have just 30 days to issue their challenge to the judge’s ruling, the Delaware court could take up to a year to issue its verdict on the appeals process.
As Musk’s enormous payout is closely tied to the value of Tesla’s stock, there’s no knowing what it could be worth by the time a decision is reached on its legitimacy. When it originally went to court, the pay pack was valued at $56 billion but when it was rejected for a second time the share options in the deal were valued at closer to $100 billion.
I guess the success of the rollout of the Cybercab over the coming months will determine whether Musk’s time is worth any more or less than that figure.
3rd Gear: VW Enters Last Ditch Talks To Avert Strike
Volkswagen’s year hasn’t been quite as bad as Stellantis’, but it’s getting close. The automaker was warned that it had just a handful of years to turn around its slowing sales and spiraling costs and is now facing strike action at its plants across Europe.
This week the automaker will enter vital talks with union bosses in an attempt to avert further strike action at VW plants in the new year, reports Reuters. The automaker has five days of talks planned this week in an attempt to reach a compromise with unions, who are calling to save plants, jobs and prevent massive wage cuts across the board:
Unions have threatened strike action at an unprecedented scale from 2025 if an agreement is not reached this year.
“If we don’t reach an outcome within our red lines, I’m certain that workers will respond to the union’s calls for escalation,” Cavallo then told reporters.
Union representative Sascha Dudzik repeated workers’ steadfast opposition to mass redundancies and plant closures, which the carmaker has said it cannot rule out as it attempts to adapt capacity to reduced demand.
Both sides are prepared for the talks to last several days, unless it becomes apparent on Monday that they are too far apart to come to an agreement this year, in which case negotiations will be paused until 2025.
The talks come at a key moment for unions and the automaker, after more than 100,000 workers walked off the job last week at nine VW plants across Germany. If a deal can’t be reached before the new year, the walkouts could be much larger.
Strikes at VW plants across Europe follow widespread walkouts here in the U.S. last year that hit Ford, Stellantis and GM. The walkouts saw workers across the Big Three win new contracts that promised better wages, working conditions and pensions across the board.
4th Gear: Tesla Raises Prices Of Its Ancient Model S
The electric vehicle market has been hit with a seemingly endless price war in recent years with everyone from legacy automakers like Ford to rising startups such as Lucid slashing prices for the models around the world. Now, the automaker that started the race to the bottom has bucked the trend and hiked prices for a car it’s not updated in almost a decade.
Tesla has increased the pricing for its Model S sedan, reports Reuters. The move to raise prices for the electric car comes after Tesla slashed pricing across its lineups and even added cheaper Model S option to its lineup:
Tesla on Friday raised the prices of its Model S cars in the United States by $5,000, according to its website.
The Model S base variant All-Wheel Drive (AWD) will now cost $79,990, while the performance “Plaid” variant will cost $94,990, according to the Tesla website.
As well as hiking prices, Tesla also added lifetime charging to the Model S, several years after abandoning the promotion, adds Electrek. The deal is thought to be part of a last-ditch attempt to boost sales of the Model S in 2024, which hasn’t had a meaningful update since 2016.
Sales of the Model S and Model X SUV have bee floundering in recent years, with EV buyers opting for Tesla’s cheaper models or rivals from automakers like Hyundai and Kia in recent years.
