Dodge Ram and Jeep are struggling so severely right now that the federal government has had to step in with a massive financial bailout to keep them afloat. Their parent company, Stellantis, is even resorting to offering employees incentives to leave as a way to cut costs. Despite this dire situation, Stellantis is still trying to sell trucks and SUVs for six figures. So, what’s really going on? Let’s break it down.
The Root of Stellantis’ Struggles: Expensive and Unattractive Vehicles
The chaos surrounding Stellantis can be traced back to one key issue: the company is failing to offer affordable, desirable vehicles that meet customer expectations. As a result, the entire major American lineup—Dodge, Ram, Jeep, and Chrysler—is experiencing a significant decline in sales.
One of the primary reasons is the prohibitive cost of their vehicles. Stellantis’ transition to electrification seems out of step with what customers actually want, and dealerships are struggling to spark interest in their products.
Government Intervention: A Billion-Dollar Lifeline
The biggest news is the federal government’s intervention, with more than a billion dollars being allocated to help Stellantis navigate the rocky transition to electric vehicles. This is an enormous sum of money, underscoring the severity of the situation.
Just a few months ago, Stellantis warned of a turbulent year ahead, and they weren’t exaggerating. The sales figures are grim: Ram is down 26% in Q2 compared to last year, Jeep is down 19%, Chrysler has fallen by 19%, and Dodge is facing an astounding 177% drop in sales.
A Grim Comparison: Stellantis and the Ghosts of Automakers Past
These alarming numbers are reminiscent of the sales drops that preceded the bankruptcy of brands like Pontiac and Mercury. Although America is currently experiencing a milder recession, Stellantis’ sales figures are not much better than those during the Great Recession.
The government’s billion-dollar bailout, aimed at protecting jobs and ensuring the success of the nation’s EV goals, feels eerily similar to the automaker crisis of the late 2000s when the government had to intervene to save the industry. Back then, the bailout worked and led to profitability within a few years—will history repeat itself?
Desperate Times: Stellantis Offers Employee Buyouts and Prepares for Layoffs
In an effort to stay afloat, Stellantis recently announced that it is offering buyout packages to its white-collar employees. This move is a clear sign of desperation, as the company is doing everything possible to cut costs.
Employees are now faced with a tough decision: take the buyout now or risk being laid off later with potentially nothing to show for their years of service. This situation raises serious doubts about whether the government’s financial aid will actually save jobs in the long run.
Factory Workers Brace for Impact: Potential Strikes and Worse Sales
The situation is equally dire for lower-level factory workers. With management being slashed and cost-cutting measures in full swing, these workers could be pushed to their limits in plants that the government is forcing to stay open with its bailout funds.
This could lead to major strikes, further declines in sales, and possibly even the collapse of Stellantis as we know it.
The High Cost of Stellantis Vehicles: Pricing Themselves Out of the Market
So, how did Stellantis find itself in this predicament? The answer lies in their pricing strategy. Stellantis has priced its vehicles tens of thousands of dollars higher than what most customers are willing to pay.
For example, a 2024 Ram 2500 Limited is priced at over $106,000, and a 2024 Ram 1500 is listed at $83,000. Similarly, the 2024 Dodge Durango SRT 392 is almost $100,000, and even the 2023 Dodge Durango SRT Hellcat, an older model, is priced at over $106,000. These prices are driving customers away at a time when Stellantis needs them the most.
Jeep’s Pricing Problem: Following the Same Troubling Path
Jeep is no exception to Stellantis’ pricing woes. The 2024 Jeep Grand Cherokee Summit, for instance, is listed at over $70,000. Even more shocking is the Wrangler 392, a more fun-oriented vehicle, which is priced at $139,000—thanks to a $30,000 dealer markup.
These exorbitant prices clearly indicate that Stellantis is out of touch with the current market, where customers are increasingly price-sensitive.
The Pandemic’s Lasting Impact on Stellantis’ Pricing Strategy
During the pandemic, Stellantis and other automakers realized they could produce fewer vehicles if they were higher-trim units because they could sell each for a much higher price.
This strategy worked in the short term, but now the residual effects are showing. Stellantis continues to focus on producing high-trim vehicles that cost 70, 80, 90, or even over 100 grand. However, almost everyone else is being priced out and turning to other automakers for more affordable options.
Public Opinion and the Shift to EVs: A Loss of Faith
Public opinion has also turned against Stellantis. As the company moved towards electric vehicles (EVs) and hybrids, customers became wary that their favorite powertrains and models would be discontinued—and that’s exactly what happened.
Iconic models like the Dodge Challenger have been phased out, and V8 engines are being replaced with less popular options. This shift has led to a loss of faith in Stellantis, particularly among working-class customers who once viewed the company as a symbol of the classic American automaker.
Can Stellantis Recover? The Long Road Ahead
At this point, it’s hard to say whether Stellantis can successfully transition, retain loyal customers, or attract new ones. The billion-dollar federal bailout may have worked in the past, but now it seems like a Band-Aid on a gunshot wound. Keeping plants open and jobs secure is important, but Stellantis’ problems run much deeper.
It will likely take a fundamental change in pricing, product planning, and dealership relations to bring Stellantis back to life.
My Thoughts
Reviving Stellantis is like performing CPR on an automaker, and only time will tell if it will be successful. As the situation unfolds, we’ll be here to keep you updated.
What do you think about Stellantis’ current predicament? Would you consider buying one of their vehicles at these prices, or would you look elsewhere? Let us know in the comments below.
