Carlos Tavares, CEO of Stellantis, resigned unexpectedly on Sunday, just two months after the company issued a profit warning. Stellantis, which owns brands like Jeep, Fiat, and Peugeot, has seen its value drop by nearly 40% this year. The company announced that it would begin the search for a new CEO in the first half of 2025. Henri de Castries, the Senior Independent Director, explained in a statement that differences in views between major shareholders, the board, and Tavares led to the resignation.
Stellantis confirmed in a statement that its board, including Chairman John Elkann, accepted Tavares’ resignation with immediate effect. The company will form a new interim executive committee, with Elkann at the helm.
Tavares, once highly regarded in the automotive industry, faced growing scrutiny after declining sales in North America prompted Stellantis to issue a profit warning in September. The warning projected a cash burn of up to 10 billion euros ($10.6 billion), mainly due to slow sales and high inventories in North America, the company’s key market. This announcement resulted in a shake-up of the company’s top management, including changes in the roles of the CFO and head of North American operations, though Tavares initially remained in his position.
Despite this, Stellantis later announced that Tavares would not seek another CEO term and would retire by early 2026. The process of selecting a new CEO was initially set to be completed by late 2024.
Shares of Stellantis have dropped around 40% this year, while U.S. competitors Ford and General Motors have seen more modest changes in their stock values. Elkann, representing the Agnelli family, thanked Tavares for his leadership in creating Stellantis, the world’s fourth-largest carmaker.
Dealers have expressed frustration with Stellantis’ performance, with one Detroit dealership owner noting that the past year has been especially tough due to slow sales and inventory buildup. U.S. sales through the third quarter of 2023 were down 17%, with significant losses across major brands like Dodge, Ram, Jeep, and Chrysler. Vehicles like the Ram 1500 and Jeep Wagoneer have accumulated excess inventory compared to their competitors.
Tensions between Tavares and the Stellantis board grew, with some feeling that his actions focused too heavily on short-term solutions to salvage his reputation, rather than the long-term interests of the company. Analysts indicated that the board’s decision to move forward without a CEO on a temporary basis shows the depth of the disagreement.
Fabio Caldato, a portfolio manager at AcomeA SGR, which holds Stellantis shares, said the company needs “new ideas and fresh forces” to plan its future. Tavares led Stellantis since its creation in early 2021, following the merger of Fiat Chrysler and PSA. His outspoken approach led to conflicts with unions and government officials, including the United Auto Workers (UAW) in the U.S. and the Italian government over production cuts in Italy. The UAW has criticized Tavares’ leadership, highlighting issues such as layoffs and overpriced vehicles sitting unsold on dealership lots.
