Jeep owner Stellantis is willing to abandon the Cherokee name, says the CEO

Asked in an interview whether he would be willing to change the name of the Jeep Cherokee if he is pressured to do so, Mr. Tavares said: “We are ready to go anywhere, up 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, well, of course we will resolve it, ”said Tavares, adding that he was not personally involved in the negotiations.

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

The Cherokee nation is the largest Native American tribe in the United States, with some 370,000 members, and Jeep has sold millions of vehicles under its name. The automotive brand extended the 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 to see Jeep stop using his tribe’s name on his SUVs. Chuck Hoskin Jr., chief chief of Cherokee Nation, said he believed Jeep had good intentions, but that “it does not honor us for having our name stamped on the side of a car,” according to a statement first released to Car. and Driver last week.

Chief Hoskin could not immediately be reached for comment.

Tavares’ comments follow a broad assessment 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 last year’s Memorial Day weekend. In December, the Cleveland Indians decided to abandon the baseball team’s old nickname after fans and groups of Native Americans criticized him as a racist. The Washington Football Team of the NFL abandoned a name that was seen as a racial slander.

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

Tavares said that the auto industry’s practice of naming cars after Native American tribes is a sign of respect.

“I don’t see anything that is negative here. I think it is just a matter of expressing our creative passion, our artistic abilities ”, said Tavares.

The Jeep brand is alongside profit drivers like Ram in the United States and Peugeot in Europe. But the company’s broad portfolio of 14 brands also includes some that will need to prove their worth, said Tavares.

Mr. Tavares said that he asked each of the brand heads to work on a 10-year plan to develop more long-term visibility in product planning.

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

After several recovery efforts, Fiat Chrysler’s Alfa Romeo and Maserati brands have failed to achieve significant returns in recent years. The Fiat brand struggles with old models and poor sales, which caused a problem of overcapacity in the company’s Italian factories.

Even the famous Chrysler brand has declined in recent years, now selling only three models compared to the six it sold a decade ago. Sales of the brand in the U.S. also fell to a third of the volume in 2015, according to company figures.

On the PSA side, the DS brand – which focuses on luxury cars and SUVs – increased its market share last year, but remains far behind some of its German competitors.

“After giving them a chance to fail, we need to be fair too,” said Tavares. “If the rest of the company is doing the right things and there is a part of the company that is pulling everyone down, we will have to take that into account.”

The Portuguese executive built his reputation in the automotive industry as a recovery specialist. Peugeot was bleeding money when it hired Tavares in 2013. Since then, the French automaker has gone from a loss of 5 billion euros, equivalent to about $ 6 billion in 2012, to become one of the most profitable mass automakers in the world. sector. Last year, it reported a net profit of € 2.17 billion, or about $ 2.62 billion, with an adjusted operating margin of 7.1% in its main automotive business.

This time, Tavares has a longer task list, including integrating the European businesses of the two companies and reducing losses in China.

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

The automotive executive said the new company could achieve its cost reduction goals in Europe without closing factories.

Asked about the lessons he learned from the chip shortage that paralyzed car factories around the world, Tavares said the big suppliers did not transmit the signals they were receiving about the impending crisis. “We were not protected,” he said. “This is a clear lesson learned.”

Tavares said that the industry-wide shift towards electrification will continue to depend on government subsidies and other financial incentives for buyers until car manufacturers discover how to reduce production costs in the coming years.

“If we propose electric vehicles that are extremely efficient, but nobody can buy them because they are expensive, what good is it from an environmental point of view?” he said.

In China, the combined sales of Peugeot and Fiat Chrysler represented 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 automotive market, while the French automaker sold just 45,965 vehicles in China last year, continuing a rapid decline for several years.

Tavares said Stellantis is not considering leaving China, removing an option he said was still at stake when the company started trading in New York earlier this year.

“We can’t get away from the biggest market in the world,” he said.

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