Carlos Tavares has resigned as CEO of Stellantis, one of the world’s largest automakers, after months of board tension and significant operational challenges.
Stellantis, which owns brands including Jeep, Fiat, Peugeot and Maserati, announced Tavares’ departure on Sunday, effective immediately.
Tavares played a central role in the 2021 merger of PSA Group and Fiat Chrysler to form Stellantis. He previously planned to remain CEO until 2026. An interim executive committee, led by Elkann, will run the company while a global search for a new CEO is conducted.
Market reaction
The announcement sent Stellantis shares tumbling more than 7% in early European trading Monday, reflecting investors’ concerns about leadership uncertainty and the automaker’s strategic direction. This decline worsened a difficult year for Stellantis, which has already seen its stock fall by 40% in 2024.
The stock is currently trading at 11.75 euros, down 6.5% over the last five days.
Former Nissan and Aston Martin CEO Andy Palmer hailed Tavares as “perhaps the most professional automotive guy I’ve ever worked with”, highlighting his role in the creation of Stellantis and his contributions to iconic car designs.
However, UAW President Shawn Fain criticized Tavares’ tenure as detrimental to workers, saying, “Tavares leaves behind a mess of painful layoffs and overpriced vehicles sitting around dealerships.” »
I have trouble changing gears
Stellantis Chairman John Elkann revealed that “different views” between Tavares and the board led to the resignation, which comes after a tumultuous year. In September, Stellantis issued a profit warning, due to weak sales in North America and excess inventory. In the United States, sales fell 17% year-over-year in the third quarter, with brands like Jeep, Dodge and Chrysler underperforming.
Tensions are said to have intensified over Tavares’ emphasis on short-term profitability at the expense of long-term strategy. Meanwhile, unions in the United States and Italy have criticized his management style, citing layoffs and broken commitments. In Italy, Tavares faced negative political reactions following the relocation of its production.
The closure of the Vauxhall van factory in the UK, which affected more than 1,000 workers, has further strained relations with stakeholders.
Stellantis’ €50 billion investment in electrification has also come under scrutiny. While Tavares championed ambitious BEV sales targets in Europe, the company’s electric vehicle market share declined by almost 2% year-over-year. Analysts attribute the decline to strong competition from Chinese electric vehicle manufacturers and weak demand in Europe.
Stellantis now faces the dual challenge of stabilizing its leadership and remedying operational shortcomings. The board emphasized the need for “new ideas and new strengths” to navigate the electric vehicle transition and regain market share.
