This was sudden.
Carlos Tavares, the CEO of Stellantis, resigned on Sunday, just two months after the company issued a profit warning that highlighted significant challenges, including a sharp decline in sales. Stellantis, the parent company of brands like Jeep, Fiat, and Peugeot, announced it would begin searching for a new CEO to take over in the first half of 2025. Senior Independent Director Henri de Castries stated that differences of opinion among shareholders, the board, and Tavares led to his departure.
Tavares, once considered a leading figure in the auto industry, came under scrutiny after Stellantis faced a tough year, particularly in North America, its key market. The company issued a warning in September about a projected loss of up to €10 billion ($10.6 billion) due to sluggish sales and inventory buildup. This led to a shake-up of Stellantis’ management, including changes in its CFO and head of North American operations, although Tavares was not initially replaced. The company had earlier indicated that he would retire at the end of his current mandate in 2026, with a search for his successor set for late 2024.
Stellantis’ stock has dropped by roughly 40% this year, while its competitors, Ford and General Motors, have seen more favorable results. Chairman John Elkann, part of the Agnelli family that founded Fiat and is a major shareholder in Stellantis, expressed gratitude for Tavares’ role in the company’s creation. However, tensions surrounding Tavares’ management style had been building, with dealers expressing frustration over slow sales and excessive inventory.
The company has seen a 17% drop in U.S. sales through the third quarter of 2023, with brands like Dodge, Ram, Jeep, and Chrysler struggling. Despite attempts to address the issues, including increasing vehicle production, Stellantis dealers reported having excessive stock, such as Ram 1500 trucks and Jeep Wagoneers, which have sat on lots for longer periods than competing vehicles. Analysts noted that the decision to operate without a CEO for the time being suggests serious rifts between Tavares and the Stellantis board.
Tavares had been with Stellantis since its formation in 2021, following the merger of Fiat Chrysler and PSA Group. His tenure was marked by aggressive restructuring, which included threats to cut underperforming brands. However, his leadership style often led to conflict, including clashes with unions in the U.S. and with the Italian government over production cuts. The United Auto Workers (UAW) voiced their discontent with Tavares’ leadership, claiming that his departure left behind a legacy of layoffs and unsold vehicles.
