Stellantis NV Chief Executive Officer Carlos Tavares, known for his cost-cutting drive, stepped down from the automaker following a dispute with the board over how to arrest weakening sales and a stock slump.
Tavares will hand over leadership of the maker of Jeep SUVs and Fiat cars to an interim committee headed by Chairman John Elkann, the company said in a statement confirming a Bloomberg News report of Tavares’s resignation earlier Sunday. A new CEO will be named in the first half of 2025, the company said.
The CEO is leaving sooner than expected as his views on the carmaker’s future differed from those of the board and some shareholders, the company said. Tavares had run Stellantis since it was formed in 2021 through a merger of PSA Group, parent of Peugeot and Citroën, and Fiat Chrysler.
Tavares previously said he would stay on until the end of his mandate in early 2026, after Stellantis began a process to find a successor to him.
Tavares is one of a number of industry executives who’ve come under pressure as carmakers confront a slumping market that’s struggling with an economic slowdown in China, flagging demand for electric vehicles in Europe and the threat of tariffs as Donald Trump prepares to return to the White House. Nissan Motor Co. Chief Financial Officer Stephen Ma is also set to step down, people with knowledge of the matter said over the weekend.
Tavares in recent weeks was trying to regain control after setbacks that led the automaker to slash expectations for full-year profit and cash flow in late September. While European rivals such as Volkswagen AG are also struggling with weak demand, the magnitude of Stellantis’s warning alarmed investors.
Financial Guidance
Stellantis on Sunday confirmed its financial guidance for the year, but the shares are down 38% in the past 12 months.
Investors, dealers and unions took Tavares to task in recent months over sliding sales, a dated US vehicle lineup and bloated inventory, resulting in the September profit warning. While Tavares pledged fixes and moved to replace his finance chief and other executives, market share continued to decline in key markets including France, fueling concerns over the carmaker’s long-term prospects.
After rising through the ranks at Renault SA under cost-cutting champion Carlos Ghosn, Tavares, 66, long impressed investors with his ability to turn around ailing automakers where others failed.
He was on track to repeat that success early on as CEO of Stellantis, reducing the number of vehicle platforms and eliminating jobs. Tensions escalated in the recent months, with unions warning that the company’s cost-cutting course was leading to quality problems and delays in the rollout of key new models. In the US, dealers accused Tavares of damaging brands such as Jeep, Dodge, Ram and Chrysler.
“He won’t be missed in North America,” said Erik Gordon, professor at the University of Michigan’s Ross School of Business. “Not by the suppliers he fought with. Not by the dealers he fought with. And not by car buyers who ignored his vehicles.”
UAW’s View
Shawn Fain, president of the United Auto Workers union, welcomed the move, saying in a statement that it is “a major step in the right direction for a company that has been mismanaged and a workforce that has been mistreated for too long.”
Chief Financial Officer Doug Ostermann, who was appointed in the wake of the September profit warning, on Oct. 31 cited “good progress” in reducing inventory and improving market share trends in the US, the company’s biggest single profit pool. Ostermann is scheduled to speak at a fireside chat at a Goldman Sachs autos conference later this week.
Stellantis has also clashed with Italy’s government over its production levels in the country. Elkann alerted Italian Prime Minister Giorgia Meloni prior to Tavares’s resignation, people familiar with the matter said.