Tavares: Moving to “bottom-up” decision-making

Since the 1960 Valiant shook up Chrysler’s product line, resulting in changes to every other car’s  brakes, axles, and front suspensions, Chrysler has done well when it set up skunkworks or other arrangements that led low-level employees have more of a say. Indeed, the revolutionary changes of the 1990s centered mainly on empowering groups to do what they knew best, without too much executive interference.

Carlos Tavares, new leader of the combined Fiat Chrysler and Peugeot—dubbed Stellantis—implied that this would become the norm, as he said that younger workers would get more input on the combined companies’ strategic task teams, which will “work on the different breakthroughs.” They will “adapt to the top-down directions [strategy] and try to figure out what is the best final conclusion. That needs time, and we’ll give them time.”

Tavares added, “The people are working so well together that they are coming [up] with tons of ideas, and we cannot just tell them ‘no,’ because the ideas are very good.”

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Tavares had an optimistic view of the future, insisting that the merger was not a defensive play. Cost savings, he said, would be around $6 billion per year, without factory closings, because of the “bottom-up ideas” from the cross-company teams. He said most of the synergy will come from parts procurement and common assemblies.

Long-time questions about the future of Chrysler, and whether Peugeot would try to return to the United States are up in the air; he did say that the chances of Peugeot’s return have fallen, and that it made sense to focus on existing American brands. He prevaricated a bit, though, saying Peugeot was still “TBD,” since studies had already been done. The idea for Peugeot’s return would be to bypass existing dealer systems and use technology for vehicle delivery and pickup, á la Tesla. The dealer network would therefore be fairly lightweight in assets. Tavares said it was likely those ideas would be used somewhere in the world, if not in the US itself.

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