Jeep owner Stellantis is open to dropping the Cherokee name, CEO says

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

“At this stage I don’t know if there is a real problem. But if there is one, of course we’ll work it out, ”Mr. Tavares said, adding that he was not personally involved in the discussions.

The Cherokee name debate is one of the issues facing Mr Tavares, who took control of Stellantis when it was formed earlier this year from the merger of Fiat Chrysler Automobiles NV and Peugeot maker PSA. In Wednesday’s interview, Mr Tavares also discussed whether he would reduce the company’s 14 brands, making Fiat factories more competitive and his plan to stick with China.

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

The Cherokee Nation leader recently said he would like Jeep to stop using its tribe’s name on its SUVs. Chuck Hoskin Jr., chief of the Cherokee Nation, said he believed Jeep had good intentions, but that “it doesn’t honor us by having our name plastered on the side of a car,” according to a statement first released. released to Car and Driver last week.

“The Cherokee Nation has an open dialogue with Stellantis leadership and looks forward to ongoing discussions,” a spokesman for the tribe said Wednesday. “We appreciate Stellantis’ helpful and thoughtful approach.”

Mr Tavares’ comments come after a widespread reckoning about racial and social injustice in the US sparked by the police murder of George Floyd, an unarmed black man, in Minneapolis over Memorial Day weekend last year. In December, the Cleveland Indians decided to drop the baseball team’s old nickname after fans and Native American groups criticized it as racist. The NFL’s Washington Football Team has dropped a name that has been seen as a racial slur.

According to company figures, Jeep Cherokee and Grand Cherokee SUVs are among the brand’s bestsellers in the US, accounting for 43% of Jeep sales in the largest market. Stellantis will roll out a highly anticipated redesign of the Grand Cherokee later this year.

Mr Tavares said the auto industry’s practice of naming cars after Indian tribes was a mark of respect.

‘I don’t see anything here that would be negative. I think it’s just a matter of expressing our creative passion, our artistic capabilities, ”said Mr Tavares.

The Jeep brand sits next to profitable drivers such as Ram in the US and Peugeot in Europe. But the company’s sprawling portfolio of 14 brands also includes some that need to prove their worth, Mr. Tavares said.

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

“I say, ‘Look 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, ” said Mr Tavares.

After several turnaround efforts, Fiat Chrysler’s Alfa Romeo and Maserati brands have failed to make meaningful comebacks in recent years. The Fiat brand is struggling with outdated models and weak sales, which has led to an overcapacity problem in the company’s Italian factories.

Even the legendary Chrysler brand has declined in recent years and now only sells three models, compared to the six it carried a decade ago. According to figures from the company, sales of the brand in the US also fell to a third of their volume in 2015.

On the PSA side, the DS brand – which focuses on high-end sedans and SUVs – grew market share last year, but lags far behind some of its German competitors.

“After we give them the chance to fail, we also have to be honest,” said Mr Tavares. “If the rest of the company is doing the right things and there is some part of the business that is bringing everyone down, we have to take that into account.”

The Portuguese director has built his reputation in the automotive industry as a turnaround expert. Peugeot bleed money when it hired Mr Tavares in 2013. Since then, the French carmaker lost 5 billion euros in 2012, which equates to approximately 6 billion dollars, to become one of the most profitable car brands in the industry. . Last year, it reported net profit of € 2.17 billion, or approximately $ 2.62 billion, with an adjusted operating margin of 7.1% in its core automotive businesses.

This time, Mr Tavares has a longer to-do list, including integrating the two companies’ European businesses and limiting losses in China.

In Europe, Mr Tavares has visited Fiat Chrysler factories – including an Alfa Romeo factory 130 kilometers south of Rome – and encouraged them to compare their performance with that of PSA factories. In addition, employees at Fiat Chrysler’s Fiat plant in Mirafiori, Italy, visited PSA’s Citroën plant in Madrid, and Mr Tavares said they were surprised by the savings in non-labor costs.

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

When asked what lessons he had learned from the shortage of chips that has been shutting down car factories around the world, Mr Tavares said that major suppliers were not relaying signals they were receiving about the impending crisis. “We were not protected,” he said. “That’s a clear lesson that has been learned.”

Mr Tavares said the industry-wide shift to electrification would continue to rely on government subsidies and other financial incentives for buyers until carmakers figure out how to cut production costs in the coming years.

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

In China, combined sales of Peugeot and Fiat Chrysler accounted for less than 1% of a market where 20 million vehicles were sold last year, according to industry data. Fiat Chrysler has long struggled to make a profit in the world’s largest car market, while the French carmaker sold only 45,965 vehicles in China last year, a continuation of a rapid multi-year decline.

Mr Tavares said Stellantis is not considering leaving China, and is scrapping an option he said was still on the table when the company traded in New York early this year.

“We cannot stay away from the largest market in the world,” he said.

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