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

Asked in an interview if he would be willing to change the name of the Jeep Cherokee if he is pushed to do so, Mr. Tavares said: “We are ready to go anywhere, to the point where we decide with the right people and without intermediaries.”

“At this stage, I do not know if there is a real problem. But if there are, well, of course we will fix it, “said Tavares, who added that he did not personally participate in the talks.

The debate over the Cherokee name is among the issues facing Mr Tavares, who took control of Stellantis when it was formed earlier this year following the merger of Fiat Chrysler Automobiles NV and the Peugeot PSA manufacturer . In Wednesday’s interview, Mr Tavares also discussed whether the company’s 14 brands would be reduced, which will make Fiat’s plants more competitive and its plan to stay with China.

The Cherokee Nation is the largest tribe in the United States, with about 370,000 members, and Jeep has sold millions of vehicles with 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.

Recently, the leader of the Cherokee Nation said he would like to see Jeep stop using the name of his tribe in his SUVs. Chuck Hoskin Jr., chief of the Cherokee Nation, said he believed Jeep had good intentions, but that “we are not honored to have our name stuck next to a car,” according to a statement first published in Car and Driver last week.

“The Cherokee nation maintains an open dialogue with Stellantis’ leadership and looks forward to ongoing discussions, ”a tribal spokesman said Wednesday. “We appreciate Stellantis taking a deep, thoughtful approach to this.”

Mr. Tavares’ statements come as a result of a broad calculation 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 Memorial Day weekend. last year. In December, the Cleveland Indians decided to set aside the nickname of the baseball team after Native American fans and groups criticized it as racist. The NFL’s Washington football team has dropped a name that had been seen as a racial insult.

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

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

“I do not see anything negative here. I think it’s just a matter of expressing our creative passion, our artistic abilities, ”said Tavares.

The Jeep brand is next to 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 have to prove their worth, Tavares said.

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

“I’m saying, ‘Look guys, I’ll give you a chance. You have to convince me, the CEO of the brand, that you have a vision,'” Tavares said.

After several investment efforts, Fiat Chrysler’s Alfa Romeo and Maserati brands have failed to return to significant changes in recent years. The Fiat brand has problems with aged models and weak sales, which has caused a problem of overcapacity in the company’s Italian factories.

Even the famous Chrysler brand has dwindled in recent years and now only sells three models compared to the six it wore a decade ago. U.S. sales of the brand have also dropped to a third of its volume in 2015, according to company data.

As for PSA, the DS brand, focused on high-end sedans and SUVs, increased its market share last year, but still lags far behind some of its German competitors.

“After giving them a chance to fail, we also have to be fair,” Tavares said. “If the rest of the company is doing the right things and there’s a part of the company that’s pulling everyone down, we’ll have to keep that in mind.”

The Portuguese executive consolidated his position in the automotive industry as a change expert. Peugeot was bleeding money when it hired Mr Tavares in 2013. Since then, the French carmaker has gone from losing 5 billion euros, equivalent to about 6 billion dollars, in 2012 to becoming one of the Most profitable mass market car manufacturers in the industry. . Last year it reported a net profit of 2.170 billion euros, or about $ 2.65 billion, with an adjusted operating margin of 7.1% in its core automotive business.

This time, Mr Tavares has a longer to-do list, which includes the integration of European companies from the two companies and the loss to China.

In Europe, Mr Tavares has been visiting Fiat Chrysler factories, including an Alfa Romeo facility, 80 miles south of Rome, and has encouraged them to compare their performance to PSA plants. In addition, employees of Fiat Chrysler’s Fiat plant in Mirafiori, Italy, visited PSA’s Citroën plant in Madrid and Mr Tavares said they were surprised by the non-labor cost savings they observed.

The car executive said the new company could achieve its cost-saving targets in Europe without closing factories.

Asked what lessons he had learned from the shortage of chips that has left car plants around the world behind, Tavares said large suppliers were not transmitting the signals they were receiving about the approaching crisis. “They didn’t protect us,” he said. “This is a clear lesson learned.”

Tavares said the shift from the entire industry to electrification would continue to depend on government subsidies and other financial incentives for buyers until carmakers figure out how to reduce production costs in the coming years.

“If we propose extremely efficient electric vehicles, but no one can buy them because they are expensive, what sense does it make 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 car market, while the French manufacturer only sold 45,965 vehicles in China last year, and continued to fall rapidly for several years.

Tavares said Stellantis is not studying leaving China, eliminating an option he said was still on the table when the company began trading in New York earlier this year.

“We can’t be far from the world’s largest market,” he said.

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