Stellantis CEO Carlos Tavares resigns due to internal disagreements
Carlos Tavares, the esteemed CEO of Stellantis, resigned unexpectedly, citing “increasingly different opinions” between him and the automaker’s board of directors. The announcement, made Sunday, marks the end of Tavares’ tenure with immediate effect, leaving the world’s fourth-largest automaker searching for a new leader during a difficult period.
In a statement, Stellantis confirmed that its board of directors accepted Tavares’ resignation and that the search for a new CEO is already underway. The trial is expected to conclude in the first half of next year. Meanwhile, an interim executive committee will be established under the leadership of President John Elkann to oversee the company’s operations.
Henri de Castries, senior independent director at Stellantis, explained the circumstances that led to Tavares’ departure. “The success of Stellantis since its creation has been based on the perfect alignment between key stakeholders, the board of directors and the CEO. However, divergent opinions have recently emerged which have led to this joint decision,” de Castries said.
A mandate marked by transformations and challenges
Tavares has been at the helm of Stellantis since its creation in 2021, following the merger of Fiat Chrysler Automobiles and Gruppo PSA, of which he previously served as president. His leadership was instrumental in orchestrating the merger and transforming Stellantis into one of the automotive industry’s most profitable players.
Despite these results, 2024 was a difficult year for the company, particularly in the US market, its main source of revenue. Poor product investments, soaring vehicle prices and aggressive cost-cutting measures have led to disappointing financial results. In September, Stellantis revised its annual targets downward, followed by a 27% decline in third-quarter net revenue.
Stellantis also faced a significant decline in vehicle sales, with global deliveries falling about 20% year-on-year in the third quarter. The decline included continued struggles in the United States, where Tavares had previously acknowledged what he called “arrogant mistakes.”
Cost cutting under scrutiny
During his tenure, Tavares made cost cutting a central strategy, aiming to save 8.4 billion euros ($9 billion) following the merger. These measures included restructuring supply chains, reducing operating costs and moving some work to low-cost countries such as Brazil and Mexico.
The company also significantly reduced its workforce, cutting 47,500 jobs – 15.5% of its global headcount – between December 2019 and the end of 2023. Further layoffs this year in the US and Italy have fueled tensions with unions, including the United Auto Workers (UAW). ), who openly criticized Tavares’ leadership and called for his removal.
Stellantis’ U.S. dealer network also expressed frustration, citing bloated vehicle inventories and insufficient financial support from the company to move products.
Fallout and future direction
Tavares’ departure comes at a critical time for Stellantis. The company faces growing challenges, including a one-year rebound that has seen its U.S.-listed shares fall 43%. While Tavares has defended his strategies as necessary for the company’s long-term success, some industry insiders argue that cost-cutting measures may have gone too far, creating operational strain and diminishing the brand’s competitiveness in markets key.
Tavares addressed this criticism earlier this year, saying the company’s difficulties were not solely attributable to budget cuts. “It’s easy to scapegoat cost-cutting when the results aren’t satisfactory,” he said in July.
As Stellantis prepares for a leadership transition, questions remain about how the automaker will address current challenges. With global sales under pressure and internal dissent among employees and retailers, the new CEO will inherit a company at a crossroads.
The search for Tavares’ successor will be critical, as Stellantis seeks to realign its strategies and restore trust among stakeholders. For now, the company’s leadership must focus on stabilizing operations and charting a path to recovery in a competitive and rapidly evolving auto industry.
