Carlos Tavares, chief executive officer of Stellantis NV, speaks during a news conference at the Fiat automobile manufacturing plant in Kragujevac, Serbia, on Monday, July 22, 2024.
Oliver Bunic | Bloomberg | Getty Images
Stellantis CEO Carlos Tavares on Thursday left the door open for possible cuts to its dividend and share buybacks next year and brushed off problems with its U.S. business that led to a major profit warning this week as a “small operational error”.
Shares slid 4% to their lowest since July 2022 as investors fret that soaring costs of reviving the automaker’s U.S. business will threaten its generous payouts to shareholders.
The scale of Monday’s warning has also hurt investor confidence in management.
Speaking during a factory visit in eastern France, Tavares said the company had operational difficulties in the U.S. but they would be fixed well before his contract ends in 2026.
He added that he intended to honor his contract and believed the board shared this view, but that in a tough market mistakes were being more closely scrutinized.
“When you are in a context which is brutal and more demanding, if you make a small operational error, well it is immediately visible,” he said, adding he was taking it as a “wake up call” and very seriously.
Shares in the owner of the Chrysler, Jeep, Fiat, Citroen and Peugeot brands have tumbled more than 55% since March, the worst performance among European autos stocks and slashing 47 billion euros ($52 billion) off the company’s valuation.
Investors have been reducing exposure to European autos in recent months on concerns over a difficult transition to electric engines, fierce competition from Chinese newcomers, and increasingly price-conscious consumers.
While Stellantis is committed to its 2024 dividend, Tavares said it was too early to confirm next year’s plan.
“The time for 2025 has not come, we will see what will happen at the end of 2024 for a discussion and a decision for 2025,” he said.