Stellantis US Crisis: Leadership Failure Demands a New Strategy

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Stellantis is in a tight spot. With leadership shakeups, lawsuits, and strained relationships with suppliers, workers, and even shareholders, the company faces challenges from all directions. The once-powerful automaker is now reeling from significant internal and external turmoil. Yet, amid this crisis, a critical question remains: How can Stellantis turn things around and find a better way forward?

In this episode of the Automotive Leaders podcast, Jan Griffiths brings on Kate Vitasek, a University of Tennessee faculty member and expert on collaborative relationships, to talk about how Stellantis can get through these tough times.

Drawing on her work with major organizations, Kate discusses how Stellantis could benefit from a shift in strategy—away from adversarial tactics and towards collaborative contracting. She highlights the "Vested Methodology" — a method designed to build win-win relationships and foster cooperation rather than conflict.

Jan worries that Stellantis' internal challenges are not only affecting its own stability but also sending ripples throughout the automotive world. Now, she calls for bold action: Tavares must step down immediately. Jan argues that Stellantis urgently requires a leader who understands collaboration, can mend these damaged relationships, and addresses the company's real issues.

Kate agrees, saying, "Change the people or change the people." She urges Stellantis to rethink its leadership approach and points out that without a mindset shift from the top, the company may continue on its downward spiral.

Towards the end, Kate Vitasek urges Stellantis to take swift, decisive action to break free from its crisis. Her advice? Gather the key leaders in a focused session, where they'd work together to craft a clear statement of intent—a roadmap to establish long-term goals and a unified direction. By confronting issues directly and with purpose, Kate believes Stellantis can realign itself for a stronger future.

Themes discussed in this episode:

• The key reasons leading to the Stellantis US crisis
• Challenges in Stellantis’ supplier and union relationships
• The ripple effect of Stellantis’ crisis on the automotive industry
• The critical role of strong supplier and union partnerships for organizational stability
• The impact of leadership decisions on organizational stability
• The consequences of a win-lose mentality in business partnerships
• Using formal relational contracting to promote win-win solutions
• Transforming adversarial relationships into collaborative partnerships

Featured Guest: Kate Visatek

What she does: An accomplished author and educator, Kate is a leading authority in strategic partnerships. She also heads research at the University of Tennessee and specializes in the Vested® business model. With experience at major corporations like P&G and Microsoft, Kate provides executive training and coaching, empowering organizations to excel in strategic collaborations and foster innovation.

On leadership: “Anytime you have uncertainty, it makes people even more anxious. And so, getting in and making some decisive decisions, just bringing calmness back. Long-term, saying, this is where we're committing to not the decision for tomorrow. Take a pause. Move quickly, but take a little pause, bring everybody together, and create the goals for the future.”

Mentioned in this episode:

• Past episode with Kate Vitasek: Transforming UAW Strike Negotiations for a Win-Win Outcome
• Vested: How P&G, McDonald's, and Microsoft are Redefining Winning in Business Relationships.
• How to build better long-term strategic partnerships by David Frydlinger, Oliver Hart, and Kate Vitasek
• Stellantis, WTF? 10 steps backward
• The 24th annual North American Automotive OEM-supplier Working Relations Index® (WRI®) Study
• What Is Vested?
• Vested Executive Education Course
• Collaborative Contracting Course

Episode Highlights

[00:03:11] Meet Kate Vitasek: An introduction of our episode guest, Kate Vitasek, a faculty member at the University of Tennessee and an expert in building win-win relationships that transform how businesses work together.

[00:04:11] Learning from Success Stories: Kates shares inspiring stories of industry giants who have transformed their power into partnerships, proving that collaboration can turn business challenges into groundbreaking successes.

[00:06:46] The Stellantis Crisis: Jan unpacks the unfolding crisis at Stellantis, detailing a timeline of poor decisions, leadership changes, and the alarming decline in relationships with suppliers and stakeholders that have led the company to the brink of collapse.

[00:13:53] The Win-Lose Mentality: Kate explores the destructive cycle of distrust between Stellantis and the UAW, emphasizing that their win-lose mentality hinders collaboration and ultimately leads to a race to the bottom, where everyone loses.

[00:19:51] Trust & Vested Way: Rebuilding trust is crucial for Stellantis to move beyond its ongoing conflicts. Kate urges leaders to embrace the Vested Methodology and lock arms with all stakeholders to achieve shared success.

[00:24:36] Change the People, or Change the People: In a bold call to action, Kate Vitasek argues that Stellantis must either transform its leadership mindset or replace those in power to address the crisis and rebuild trust with stakeholders.

[00:28:28] A Call to Action for Stellantis: Jan and Kate a rallying cry for Stellantis’ leadership to act quickly, encouraging them to bring key stakeholders together for an alignment workshop that could reshape the company’s future.

Top Quotes:

[00:14:53] Kate: “What we teach people is how to flip from this Win-Lose game to a Win-Win game when they're negotiating and creating their contracts. And it really is about long-term thinking, right? So, we're very much about the short term, as you spelled out in that recent history lesson of Stellantis. And when we change, and we start to work together on solving real business problems, we think of it as creating value, and you share that value that's created. You really can all go home winners.”

[00:17:21] Kate: “When someone has a power-based negative philosophy, and that gets rooted into the contracts, it opens the door for the other party to want to shade, to retaliate. And not necessarily in an all-out battle, but in gray zones; they can, contractual shading. And then, if that's still not working, then we get into hold up. And this is where the UAW and Stellantis are now; they've held each other up, and they feel like nothing on either side is being fair, so it results in disputes and lawsuits. But what we could do is change the nature of that from this power-based tit-for-tat that you clearly spelled out these bad behaviors among Stellantis.  You can change that and invite the other parties, his suppliers, and the UAW to think differently and to use our methodologies, our proven methodologies, to get people unstuck”

[00:18:44] Kate: “This is the scary part because if we don't get our act together, we're not going to have the next-generation automaking industry. And so, we have to realize that ourselves, our suppliers, and our unions are not the enemy. They are our friends that are going to help us beat the competition. Instead of competing against our suppliers or at their expense, we need to compete with them against the real enemy.”

[00:21:55] Kate: “It's this tit-for-tat behavior. When you do something, I don't think is trustful, or that is power-based, and I don't think is fair, you put me in a corner to retaliate. So, my behavior is a direct result of your behavior. You don't like my behavior, so then you take it to the next level. So, we were in this race to the bottom. And so, when you take a step back, you realize that our human behavior, the process that we use, got us there. The process that we use can get us out of there. And that's what we've done at the University of Tennessee is: created a process we call the Vested Methodology. We call it vested because both parties should have a vested interest in each other's success. As you said, to lock arms, to beat the real competition, to beat our business problems, and when we do, that magic happens.”

[00:23:47] Kate: “Their own dealers! These are people in the family! We're like turning on our own family. I would say think about a different process. I invite the Stellantis leaders and anyone. Come down; I'll give Carlos and Shawn a scholarship to come to our class to learn a different process. Now, if they don't want to use it, that's their problem, right? But if you aren't open to learning about Nobel Prize-winning research and a process like ours, that's winning awards. You're not at rock bottom yet, and maybe they just need to be at rock bottom, but maybe these lawsuits are what's causing them to be at rock bottom, and they're at wit's end, and they'll decide to change the game.”

[00:27:27] Kate: I have hope that if they open their minds, they will learn a better way. But if you don't open your minds and you're not willing, then you're absolutely right. We need to change the leaders. Change the people, or change the people.”

Mentioned in this episode:

This episode is sponsored by Lockton, click here to learn more