In the ever-changing landscape of the global automotive industry, Carlos Tavares, CEO of Stellantis, unexpectedly resigned on December 2, a move that has drawn widespread attention. This decision came as tensions between shareholders and the management within the company had escalated, with Tavares's departure occurring just two months after the company issued a profit warning following a challenging year. In 2024, Stellantis's stock plummeted by 40%, reflecting the difficult circumstances facing the world's fourth-largest automaker by sales.
Stellantis' board of directors, under the chairmanship of John Elkann, reportedly accepted Tavares' resignation swiftly and immediately set up an interim executive committee, headed by Elkann, with the aim of searching for a new CEO, a process that is expected to be completed in the first half of 2025.
Independent director Henry de Castres pointed out that the differing strategic views between Tavares and major shareholders and the board were key reasons for the resignation. Back in September, Stellantis had issued a profit warning, indicating an anticipated cash shortfall of up to €10 billion due to slowing sales in North America and high inventory levels. In the third quarter, U.S. sales fell by 17% year-on-year, with brands like Dodge, Ram, Jeep, and Chrysler showing lackluster performance.
Inventory issues have become increasingly apparent, with some models, such as the Ram 1500 pickup and the Jeep Wagoneer, significantly exceeding average supply levels compared to competitors. The profit warning prompted a management reshuffle, affecting key roles in finance and operations in North America, although Tavares initially retained his position.
However, tensions reportedly escalated as the board viewed Tavares’s strategies as overly focused on short-term solutions rather than the company's long-term interests. Frustration among traders and unions has grown over the past year. Jeff Latham, a Stellantis dealer in Detroit, expressed relief at the leadership change, noting the difficulty in selling even the 2023 models.
Meanwhile, United Auto Workers President Shawn Fain criticized Tavares's tenure, pointing to layoffs and unsold vehicles, adding that “Tavares leaves behind a mess.” In the U.S., the automaker faced nationwide strike threats from the United Auto Workers, 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 that underperforming brands within the company’s portfolio of 14 brands were at risk of being phased out. While praised for his vision, his tenure was marked by conflicts with stakeholders, including labor unions and the Italian government.
Now, Stellantis faces the dual challenge of navigating leadership uncertainty while addressing its operational and market conflicts. Shareholders, including the Agnelli family, the Peugeot family, and the French government, emphasized the need for “new ideas and new forces” to shape the company’s future.
The struggles of Stellantis starkly contrast with competitors like General Motors, which saw a 55% increase in its stock in 2024. The company’s collaboration with Rivian and efforts to transition to a more electric lineup are likely to be central under the new leadership.
While Elkann thanked Tavares for his contributions to the establishment of Stellantis, the sudden resignation of the CEO underscores the broader challenges facing traditional automakers in an evolving global market.
Senior Writer The quest for automotive knowledge began as soon as the earliest memories. Various sources information, even questionable ones, have been explored including video games, television, magazines, or even internet forums. Still stuck in that rabbit hole.
