CARLOS TAVARES, the CEO of Stellantis, abruptly resigned on Dec 2 following mounting tensions among the company’s shareholders and leadership. His departure comes just two months after a profit warning that marked a difficult year for the automaker, which oversees brands like Jeep, Fiat, and Peugeot.
Stellantis’ shares have plummeted 40% in 2024, reflecting a challenging environment for the world’s fourth-largest automaker by sales.
According to Reuters, the Stellantis board, chaired by John Elkann, has accepted Tavares’ resignation “with immediate effect.”
Elkann will lead an interim executive committee while the company seeks a new CEO, a process expected to conclude in the first half of 2025.
Senior Independent Director Henri de Castries noted that differing strategic views between Tavares, major shareholders, and the board led to the resignation.
In September, Stellantis issued a profit warning, citing a projected cash burn of up to €10 billion (RM47bn) due to sluggish North American sales and high inventory levels. Sales in the US dropped 17% year-over-year in the third quarter, with brands like Dodge, Ram, Jeep, and Chrysler underperforming.
Inventory issues were pronounced, with some models, such as the Ram 1500 pickup and Jeep Wagoneer, significantly exceeding average supply levels compared to competitors.
The profit warning prompted a management reshuffle, affecting key roles in finance and North American operations, though Tavares initially retained his position.
However, tensions reportedly escalated as the board viewed Tavares’ strategies as overly focused on short-term solutions rather than long-term company interests.
Dealers and unions have voiced growing frustration over the past year. Jeff Laethem, a Stellantis dealer in Detroit, expressed relief at the leadership change, citing difficulty selling even 2023 models.
Meanwhile, UAW President Shawn Fain criticized Tavares’ tenure, citing layoffs and unsold vehicles, adding that “Tavares is leaving behind a mess.”
In the US, the automaker faced threats of a nationwide strike from the United Auto Workers union, which accused Stellantis of failing to meet labor agreement commitments.
Since the merger of Fiat Chrysler and PSA Group to form Stellantis in 2021, Tavares had warned underperforming brands within the company’s 14-brand portfolio were at risk of being cut.
While he was praised for his vision, his tenure was marked by clashes with stakeholders, including labor unions and the Italian government.
Stellantis now faces the dual challenge of navigating leadership uncertainty and addressing its operational and market struggles.
Shareholders, including the Agnelli family, the Peugeot family, and the French government, emphasized the need for “new ideas and fresh forces” to shape the company’s future.
Stellantis’ struggles contrast sharply with competitors like General Motors, which saw a 55% stock gain in 2024. The company’s collaboration with Rivian and efforts to transition to a more electrified lineup will likely be a central focus under new leadership.
Elkann thanked Tavares for his contributions to the creation of Stellantis, but the CEO’s sudden resignation underscores the broader challenges facing legacy automakers in an evolving global market.
