Stellantis CEO Carlos Tavares unexpectedly resigned on Sunday, two months after a profit warning at the maker of Jeep, Fiat and Peugeot cars that has lost around 40% of its value this year. It was an abrupt resignation by Carlos Tavares also due to increasingly “different views” between the executive and the board of directors. Stellantis, the world’s fourth-largest carmaker said its board accepted Tavares’ resignation on Sunday.
Tavares shall leave Stellantis effective immediately. The company said it would seek to find a replacement CEO in the first half of 2025.
Stellantis CEO resignation
“Stellantis’ success since its creation has been embedded in a perfect alignment between the reference shareholders, the Board and the CEO. But, in recent weeks different views have emerged which have resulted in the Board and the CEO coming to today’s decision,” Henri de Castries, Stellantis’ senior independent director, said in a release.
Jeep-maker said in a statement on Sunday that its board, including Chairman John Elkann, accepted the CEO’s resignation “with immediate effect” and that a new interim executive committee, chaired by Elkann, would be established.
Stellantis on Tavares’ early resignation
A Stellantis spokesman declined to disclose any additional information regarding Tavares stepping down.
Carlos Tavares’ resignation comes less than two months after the company announced he would retire at the end of his contract in early 2026. At the time, Stellantis said it planned to name a a replacement by the fourth quarter of next year.
Regarded as one of the most respected executives in the auto industry Tavares has led Stellantis since its creation through a 2021 merger between Fiat Chrysler Automobiles and PSA Groupe, where he had been board chair since 2014.
The longtime automotive veteran was widely heralded in recent years for spearheading the merger and making Stellantis one of the world’s most profitable automakers.
Faltering sales at Stellantis
This year, Stellantis’ financial results have severely underperformed expectations amid mismanagement of the U.S. market with a lack of investment in new or updated products, historically high prices and extreme cost-cutting measures.
Tavares’ approach came under scrutiny after slumping sales in North American. This falling sales led the automaker in September to issue a profit warning on its 2024 results. Also, leading to forecast for a cash burn of up to $10.6 billion, mostly due to slow sales and bloating inventories in its North American market.
The warning triggered a wide reshuffle of the group’s top management. This changes included changes of its chief financial officer and of its head of North American operations, but initially spared Tavares.
The company reported a roughly 20% decline in year-over-year global vehicles sold during the Q3.
Stellantis’ annual forecast
The car makers who also owns brands such as Dodge, Fiat, Chrysler and Peugeot, lowered its annual guidance targets in September, a month ahead of the automaker reporting a 27% decline in third-quarter net revenues.
Cost-cutting at Stellantis
Tavares made cost-cutting a critical mission for Stellantis, including a self-reported $9 billion in reductions from the merger. This included reshaping the supply chain and operations. Also reducing head counts in the U.S. and increasing work in lower-cost countries such as Brazil and Mexico.
Tavares pushed back on the claim that the company’s massive cost-cutting efforts had created problems.
“When you don’t deliver for any reason … you may want to use a scapegoat. The budget cut is an easy one. It’s wrong,” Tavares said in July.
Layoffs at Stellantis
Stellantis has reduced headcount by 15.5%, or roughly 47,500 employees, between December 2019 and the end of 2023. Additional job cuts this year involving thousands of plant workers the U.S. and Italy. This has also drawn the ire of unions in both countries.
The United Auto Workers union has been calling for Tavares’ removal for several months as its members face layoffs and production cuts. Stellantis’ U.S. dealership network also has spoken out against Tavares amid bloated inventories and a lack of financial support from the company to sell vehicles.
Stock update
Stellantis shares have lost around 43% of their value in 2024. Sshares of U.S. rival Ford Motor are down 7% this year and General Motors up 55%. Stellantis stock closed at €12.54 up 1.51% at closing.
