Introduction

When the entire mountain collapses towards you, even if you are known as a 'cost killer' or 'management master,' all your accolades mean nothing.

'Fiat Chrysler Automobiles (FCA) no longer exists, but Fiat and Chrysler have at least been given a decade to prove their worth to continue existing.'

Image|Carlos Tavares, confidently standing under a sea of stars, approximately three and a half years ago

Approximately three and a half years ago, in mid-May 2021, Carlos Tavares, then newly appointed CEO of the nascent STELLANTIS group, made this statement to the media. Domestically, he is better known as Tang Weishi.

The official explanation for the group's name, STELLANTIS, derives from the Latin word 'stella,' meaning a shining star in the night sky, symbolizing 'to brighten with star'—to illuminate with the brilliance of stars.

Just as its name implies, this super automaker, formed by the merger of FCA and PSA Group, brought together as many as fifteen automotive brands, including luxury brands like Alfa Romeo, DS, and Maserati.

Image|Judging solely by the automotive brands held by the new group formed by the merger of FCA and PSA, STELLANTIS is indeed a constellation of stars

As the successor to Philippe Varin, Tang Weishi, then CEO of PSA, led this groundbreaking merger that once shook the industry. From the perspective of the first half of 2021 alone, it seemed to be fulfilling the prophecy of Sergio Marchionne, the legendary former CEO of Fiat Chrysler Automobiles who passed away in 2018—that only three to five global automakers would survive in the future.

However, to everyone's surprise, less than four years later, with the sudden announcement of STELLANTIS Group CEO's resignation, not only did those automotive brands not get the promised 'ten years' to prove themselves, but even Tang Weishi himself lost confidence in maintaining the group and his image, halting his 2026 retirement plan announced on October 13th.

Image|Sergio Marchionne, the legendary former CEO of FCA, passed away in July 2018 due to illness. Not having the opportunity to verify his prophecy is, in a way, fortunate

We can even see that Marchionne's prophecy seems to be unfolding along a path previously unimaginable...

Blame Shifter, the 'King of Words'

The signs of Tang Weishi's eventual departure from STELLANTIS, which he vigorously promoted and founded, actually emerged in the Chinese market even before the group's establishment, as early as two years before the new group's birth.

In the Chinese market, the once glorious wave of joint ventures saw discordant notes in 2019. At that time, due to continuous years of losses, the business of Changan PSA Peugeot Citroen ended, and the joint venture was sold in its entirety to Baoneng Group. After two unsuccessful attempts at localization, Fiat, which once relied on locally produced Jeeps to sustain Guangqi Fiat Chrysler Automobiles, also faced a sharp decline in sales in 2019 and eventually announced the cessation of production at the end of 2021, officially completing the bankruptcy process the following November.

Image|The bankruptcy of Guangqi Fiat Chrysler was indeed chaotic. In Tang Weishi's forceful cost-cutting measures, we bore the brunt this time

After this tumultuous period, Dongfeng Peugeot Citroen Automobile Company, a joint venture between PSA and Dongfeng, became STELLANTIS's only spark in China. At that time, Dongfeng Peugeot Citroen was in a situation that was neither good nor bad. Especially after the launch and popularity of the C5 X 'Versailles' in August 2021, this spark showed signs of reigniting, indicating that with effort, it could still make a difference.

However, the sales of a few thousand units in such a vast Chinese market did not impress Tang Weishi. Dongfeng Peugeot Citroen soon felt the sting of betrayal from its French joint venture partner's CEO.

In October 2022, during the Paris Motor Show, Tang Weishi suddenly announced the 'withdrawal from the Chinese market'—shifting to an 'asset-light model' by importing from Europe for local sales. This move caused quite a stir at the time, appearing akin to betrayal to the Chinese joint venture.

When explaining the reasons to the outside world, Tang Weishi, in addition to emphasizing the changed geopolitical environment, mainly blamed others. For example, when explaining the collapse of the Jeep brand in the Chinese market, he attributed it to excessive policy intervention in the Chinese market and even the 'unfriendliness' of Chinese consumers towards foreign brands.

In fact, similar scenes had already played out when he was CEO of the PSA Group.

Image|Photo of Tang Weishi during an interview with ECNS in April 2019 (Photo credit: ECNS)

During the 2019 Shanghai Auto Show in April, Tang Weishi, who traveled specifically for the event, was interviewed by local media. When asked, 'Last year, PSA achieved around 30% growth in global sales, but why did it decline by 30% in the Chinese market?' he launched into a long-winded response, the crux of which was that 'our group's brands and products are first-rate, and the problem lies in marketing and management.'

In short, when faced with unavoidable sharp questions, especially when the enterprise is facing comprehensive failure in its important markets, Tang Weishi's basic strategy, whether facing public scrutiny or internal presentations, is to unhesitatingly shift blame. He insists on the principle of 'I (we) am (are) not wrong' until the very end.

'Three Axes' of Cost Optimization

Contrary to the Chinese habit of starting with self-criticism when facing problems, Tang Weishi's posture as the 'King of Words,' who is adept at shifting blame, is logical given his Western cultural background. Of course, Tang Weishi's ability to drive the integration of PSA and FCA was not just about being a 'King of Words.'

Since its inception, STELLANTIS, under Tang Weishi's tough stance, has forcibly pushed through various 'optimization' operations with a severity rarely seen in European and American enterprises—human resources optimization, production optimization, and operation and maintenance optimization. In familiar terms, these are Tang Weishi's 'three axes.' Let's start with human resources optimization.

In 2023 alone, the group forcibly pushed through two buyouts of service years in the United States, optimizing thousands of employees originally from Chrysler plants with a buyout fee, with 2,450 employees 'graduating' at once from the Warren plant in Michigan. Additionally, thousands of employees have been gradually 'graduated' from factories in Italy and the UK, adhering to the principle that a short, sharp pain is better than a long, drawn-out one.

For some factories where optimizing personnel alone was not enough to reduce costs, Tang Weishi resolutely implemented a new strategy of factory-wide 'graduation.'

Image|Vauxhall's Luton factory in the UK, with a history of nearly 120 years, currently specializes in the production of minivans

The Vauxhall factory in Luton, UK, which specializes in the production of minivans and has a history dating back to 1905, making it almost a relic of industrial history, was not spared from cost-cutting measures. The plan is for the factory, along with its 1,100 employees, to 'graduate' by the beginning of next year at the latest.

The Mirafiori factory in Turin, Italy, although it is the production base for Maserati's Gran Turismo and Gran Cabrio models and the only electric vehicle factory under the Fiat brand for the Fiat 500, has announced multiple production halts since 2024 due to poor sales of these three models. In the future, there is a significant chance that the factory, along with its 3,245 employees and managers, will also 'graduate.'

Image|The Mirafiori factory in Turin can almost be seen as the cradle of the Italian automotive industry. Although there have only been reduced shifts and occasional production halts so far, there is still a possibility of closure in the future...

According to incomplete statistics, if we move the timeline back to the end of 2019, before the official establishment of the group, by the end of 2023, STELLANTIS had laid off 15.5% of its total workforce, amounting to approximately 47,500 employees. This is a significant reduction in a European or American enterprise.

In addition to various cost optimization measures through 'graduation,' Tang Weishi also promoted the reduction of unnecessary expenditures within the group, such as travel and meeting expenses. In the nearly four years since taking office, he has also led the expansion and migration of the group's supply chains for various brands. He announced the cessation of cooperation with some automotive component suppliers and actively extended the group's reach upstream in the industrial chain by producing some components and even assemblies itself to achieve cost control. These measures may remind some of a domestic automaker.

Although this is bound to cause many suppliers to face difficulties or even bankruptcy, it significantly benefits the cost optimization of the group's financial statements, embodying the saying, 'let others perish while I remain unscathed.'

The Master of Facial Expressions, Profit Above All

Highly adept at shifting blame and ruthless in cost optimization, Tang Weishi is not the stereotypical 'tyrant' image often associated with CEOs of super corporations. In fact, for the benefit of STELLANTIS, he is flexible and can change his face at any time to seize actual benefits.

The statements made by Tang Weishi regarding PSA and even STELLANTIS's failures in the Chinese market, as mentioned earlier, were quite euphemistic. From the perspective of the European automotive industry, he was even once considered one of the 'hawks' among automotive executives towards China.

Image|Photo of Tang Weishi during the 2022 Munich Auto Show, where he discussed the possibility of future electric vehicle price reductions with reporters, reinforcing his stance on 'delaying' electrification

During the 2022 Munich Auto Show, Tang Weishi bluntly declared in an interview with German media that 'cheap Chinese electric cars are invading Europe.' After entering 2023, his stance became even clearer, publicly calling on European countries to 'restrict' Chinese cars on multiple occasions and even participating in lobbying activities by automotive executives targeting politicians, hoping to 'protect the interests of European automakers' by imposing additional tariffs. At the same time, he has repeatedly expressed his hope that European governments will introduce protection and subsidy schemes for European automakers.

Almost simultaneously, however, while Tang Weishi was making these bold statements, STELLANTIS was seeking a new energy vehicle partner in China and signed a formal agreement in late October 2023 in Hangzhou, confirming a deep alliance. Subsequent revelations indicate that the initial contact between the two parties dates back to February 2023.

The details of this cooperation include a substantial capital injection by the STELLANTIS Group to acquire approximately 20% equity in Leap Motor and two seats on its board of directors. At the same time, the two parties established a joint venture called Leap Motor International with a 51:49 shareholding ratio. Excluding Greater China, this joint venture has the exclusive right to export and sell Leap Motor products in all other global markets, as well as manufacture Leap Motor products locally.

Image|Leap Motor has overtaken NIO (Hezhong Auto) through this move, becoming the one who outruns their companions when chased by a bear

Regarding the specific direction of their cooperation, the official statement says that 'the STELLANTIS Group will leverage its extensive global commercial strength and experience to help Leap Motor accelerate the global sales of its high-tech and cost-effective products.' Simply put, the STELLANTIS Group has invested a significant amount of money (€1.5 billion) to obtain the global agency rights and related technologies of Leap Motor. The essence of Leap Motor International at this stage is so-called 'reverse joint ventures,' importing Leap Motor vehicles produced domestically to Europe for sale through STELLANTIS's channels and networks.

As for whether to directly obtain technology licenses for production in Europe, it depends entirely on actual needs.

Many have criticized Tang Weishi for barely mentioning STELLANTIS's new energy strategy and planning, apart from the 'baking the cake' promise in July 2021 to launch 15 hybrid models and 40 pure electric models by 2025 and the vague 'Dare Forward 2030' strategic plan announced on March 1, 2022, making him appear to be a traditional fuel enthusiast opposed to new energy. However, based on current facts, this perception is superficial.

"Figure|Dare Forward 2030 is actually very 'visionary' and more like a response to the prevailing public opinion on emission reduction at that time."

"In reality, actions such as remaining silent, avoiding the topic, lobbying the government to hinder Chinese automakers, and then suddenly changing tactics to court Zero Running are all essentially about buying time."

"The STELLANTIS Group actually has its own pure electric platform plan, STLA, but the first platform, STLA Medium, was not officially announced globally until July 2023. The larger STLA Large, with its 400V and 800V architectures, a mid-mounted battery pack ranging from 85 to 118kWh, and even compatibility with hybrid and gasoline power systems, is even further behind in progress and was only officially launched in mid-January of this year."

"Figure|STLA Medium (top) and the powerful STLA Large will become the core of STELLANTIS Group's new energy products"

""According to the plan, the other two extended models in the STLA series platforms, STLA Small and STLA Frame, will not be fully launched until the second half of 2025 at the latest. As for the design to market launch of the new generation of pure electric vehicles based on these platforms, it will take at least two years. That is, the first model based on the earliest launched STLA Medium platform will not be released until the end of next year or even early the year after that..."

"As early as a year ago, the latest generation of new energy vehicles created by Chinese competitors, which are not only full of gimmicks but also have extremely high performance, have been knocking on the door of the European market."

"Undoubtedly, the speed of development and evolution in the automotive industry has far exceeded the limits of understanding and imagination of the older generation of automotive people who have come a long way during the glory days of the last era. In 2021, Carlos Tavares' 10-year outlook was clearly overly optimistic."

"Moreover, even after just one and a half months of observation following his statement of 'retiring in 2026' on October 13, this timeline remains uncertain."

"For both the STELLANTIS Group and Carlos Tavares himself, the world is increasingly deteriorating, and business is becoming increasingly difficult."

"Figure|In North America, whether it's the United Auto Workers union, auto workers themselves, or dealers, the STELLANTIS Group has made enemies of them all."

"In North America, after more than a year of tug-of-war and confrontation with workers and labor unions, the STELLANTIS Group is steadfastly pushing forward with layoffs, supply chain shifts, and factory relocations. The cost, however, is that the United Auto Workers union has made enemies of the STELLANTIS Group and even Carlos Tavares himself. Even dealers across the United States are strongly dissatisfied because the group has not supported their aggressive promotional plans to maintain market share amid the decline in the automotive market following the aftereffects of this season's dollar interest rate hikes."

"In Europe, after the Russia-Ukraine conflict, the situation where governments are struggling to maintain stability through huge subsidies is rapidly collapsing due to unsustainability. And with the change of U.S. presidential administration, a familiar figure that once terrified European countries has announced their return."

"Marked by Volkswagen's plan to lay off 30,000 workers and close multiple European factories, a new wave of crisis is sweeping through the entire European automotive manufacturing industry. Even more alarming is that the impact is even spreading to upstream industries: ZF laid off 14,000, Continental laid off 13,000, Faurecia laid off 10,000, Bosch laid off 5,500, Siemens laid off 5,000, Schaeffler laid off 4,700, and Webasto laid off 1,600..."

"Figure|Of course, one of the factors driving Volkswagen's large-scale layoffs is the significant investment loss at Northvolt, estimated to exceed 2 billion euros."

"This even reaches the foundation of European manufacturing - "

"Steel giant ThyssenKrupp laid off 11,000, chemical giant Evonik laid off 1,500, communications giant Vodafone laid off 3,000, and even transport giant DB Schenker, as well as software group SAP, which is heavily associated with the automotive industry, have announced layoffs of 30,000 and 5,300 respectively."

"Over the past four years, and even tracing back to the PSA era, almost every cornerstone laid by Carlos Tavares and his colleagues, whether through careful calculations or decisive decisions, has been rapidly cracking and disintegrating. However, the once magnificent STELLANTIS edifice and all its beauty were built on those very cornerstones."

"Upon the announcement of his resignation, Chairman John Elkann, on behalf of the STELLANTIS Group, thanked Carlos Tavares for his years of loyal service and sang high praise for his role in creating the Stellantis Group and previously turning around the PSA Group and Opel brand."

"Figure|Will the stars continue to shine? I don't know, and I'm afraid they don't know either..."

"I don't know the true thoughts of Carlos Tavares, who has just been 'fired.' However, from his perspective, all of this is no longer so important once his resignation decision takes effect. It is commendable that he was able to withdraw before all of this happened, especially before his lifelong reputation was substantially damaged."

"After all, when the mountain collapses and the entire mountain falls in front of you, what excellent professional manager can bear that responsibility? Marchionne's prophecy may indeed be accurate, but it may no longer be European automakers that integrate all the remaining brands..."

"But let the flood waters rise!"