DETROIT— stellantis CEO Carlos Tavares unexpectedly resigned from the automaker amid “increasingly different views” between the executive and the board, the company said Sunday.
The world's fourth-largest automaker said its board accepted Tavares' resignation on Sunday. Your departure is effective immediately.
Jeep maker Stellantis said its process to name a new CEO is “very advanced” and that it hopes to conclude the search during the first half of next year. Until then, the company said it will establish a new interim executive committee headed by Chairman John Elkann.
“Stellantis' success since its creation is based on perfect alignment between the key shareholders, the board of directors and the CEO. However, in recent weeks different points of view have emerged that have led the board of directors and CEO to make today's decision,” Henri said de Castries, senior independent director at Stellantis, in a statement.
A Stellantis spokesperson declined to disclose any additional information about the resignation.
The automaker's U.S.-listed shares fell about 7% in premarket trading on Monday. Before the resignation, the stock fell about 43% in 2024.
“The market will inevitably ask why the Stellantis board felt that not having a permanent CEO for a few months was preferable to keeping the current CEO in place,” Bernstein analyst Daniel Roeska said in a note to investors. on Sunday night. “We endeavor to identify any scenarios in which these developments could have a positive effect as far as the share price is concerned.”
Stellantis on Sunday reconfirmed its previously reduced guidance for the year that included an adjusted operating income margin of 5.5% and 7% and industrial free cash flow of between -5 billion euros ($5.3 billion) and – 10,000 million euros.
Tavares' resignation comes less than two months after the company announced that he would retire at the end of his contract in early 2026. At the time, Stellantis said it planned to name a successor by the fourth quarter of next year.
Stellantis stock in 2024
Tavares, 66, had led Stellantis since its creation through a 2021 merger between Fiat Chrysler Automobiles and PSA Groupe, where he had been chairman of the board since 2014.
The auto industry veteran, a prodigy of former Nissan executive Carlos Ghosn, was widely praised in recent years for spearheading the merger and turning Stellantis into one of the world's most profitable automakers.
But this year, the company's financial results have been well below expectations amid poor management of the US market – its main cash generator – with a lack of investment in new or updated products, historically high prices and measures extreme cost reductions.
The company, which also owns brands such as Dodge, Fiat, Chrysler and Peugeot, lowered its annual targets in September, a month before the automaker reported a 27% drop in third-quarter net income.
“Carlos Tavares' credibility was greatly undermined by the collapse of profitability at Stellantis' North American operations, which caused the group to cut its 2024 guidance on September 30,” Bernstein's Roeska said.
Stellantis sales have also struggled this year. Most recently, the company reported a roughly 20% decline in global vehicles sold year-over-year during the third quarter. That included extending a years-long free fall in the United States despite Tavares' attempts to correct what he has called “arrogant” mistakes.
Tavares made cost reduction mission critical for Stellantis, including reductions of €8.4 billion as a result of the merger.
Ferrari and Stellantis president John Elkann attends an event to inaugurate Ferrari's new 'e-building' facility, where the luxury sports car maker is testing lines ahead of the planned start of car production in early 2025, in Maranello, Italy, on June 21, 2024.
Daniele Mascolo | Reuters
Cost-saving measures have included reshaping the company's supply chain and operations, as well as reducing staff in the United States and increasing work in lower-cost countries such as Brazil and Mexico.
Several current and former Stellantis executives, who spoke on condition of anonymity due to possible repercussions, previously described the cuts to CNBC as exhausting to the point of being excessive and creating problems in the US.
Tavares rejected the claim that the company's massive cost-cutting efforts had created problems.
“When you don't deliver for any reason… you may want to use a scapegoat. Budget cutting is easy. It's wrong,” Tavares said in July.
Stellantis reduced its workforce by 15.5%, or approximately 47,500 employees, between December 2019 and the end of 2023, according to public documents. Additional job cuts this year involving thousands of plant workers in the United States and Italy have drawn the ire of unions in both countries.
The United Auto Workers union has been calling for Tavares' ouster for several months as its members face layoffs and production cuts. Stellantis' US dealer network has also spoken out against Tavares amid bloated inventories and a lack of financial support from the company to sell vehicles.
UAW President Shawn Fain, in a statement Sunday night, welcomed Tavares' resignation, calling it “a big step in the right direction for a company.”
“Thousands of UAW members at Stellantis have been calling on the company to fire Carlos Tavares due to his reckless mismanagement of the company,” Fain said. “We are pleased to see the company responding to the pressure and correcting course.”
