Stellantis Chief Executive Carlos Tavares resigned abruptly on Sunday after nearly four years in the top spot of the automaker, which owns car brands like Jeep, Citroen and Ram, amid an ongoing struggle with slumping sales.
The world’s fourth-largest carmaker by sales announced that its board accepted Tavares' resignation Sunday, effective immediately.
Stellantis noted Sunday that the process to appoint a new, permanent CEO is "well under way.” In the meantime, the company says a new interim executive committee, led by Chairperson John Elkann, will be established.
As head of PSA Peugeot, Tavares took control of the Netherlands-based company in January 2021 – when it merged with Fiat Chrysler Automobiles, creating an automotive giant that is the parent to several well-known brands today. Beyond Jeep, Citroen and Ram, Stellantis’ portfolio includes Dodge, Chrysler, Fiat, Peugeot, Maserati and Opel.
Previously regarded as one of the most respected executives in the auto industry, Tavares came under criticism after Stellantis issued a profit warning on its 2024 results.
That included a forecast for a cash burn of up to 10 billion euros ($10.6 billion), mostly due to slow sales and bloating inventories in its North American market.
North American operations had been Stellantis' main source of profits for some time, but struggles piled up this year – with the company citing larger market changes and rising competition.
For its third quarter, Stellantis posted a 27% plunge in net revenues, as gaps in launching new products and action to reduce inventories also slashed global shipments of new vehicles by 20%.
The carmaker reported net revenues of 33 billion euros in the three-month period ending Sept. 30, down from 45 billion euros in the same period last year. All regions except South America reported double-digit dips in revenues – led by North America, which plunged 42% to 12.4 billion euros. Europe revenues dropped 12% to 12.5 billion euros.
Stellantis shares have lost around 40% of their value this year, while shares of U.S. rival Ford Motor are down 7% this year and General Motors up 55%.
In recent months, Tavares had been under fire from U.S. dealers and the United Auto Workers union after the release of dismal financial performance reports. He also oversaw cost-cutting efforts that included delaying factory openings and laying off union workers – adding to further strain with the UAW, which filed several grievances against Stellantis and threatened to strike in recent months.
Beyond the U.S., Stellantis has faced pressure in Italy – where lawmakers questioned the former chief executive over the company's production plans in October, with the far-right government accusing the company of relocating assembly plants to low-cost countries. Tens of thousands of autoworkers in the country also held a one-day walkout, calling for more employment certainty and protections.
In efforts to revive sales, Stellantis previously made a number of leadership changes in October, which included new heads of operations in North America and Europe. At the time, the company expected Tavares to step down in early 2026, closer to the end of his five-year contract.
The company confirmed in September that it was searching for a CEO to eventually succeed Tavares, but maintained that those efforts were part of standard leadership transition plans.
In a statement Sunday, Stellantis’ senior independent director Henri de Castries said that Stellantis' success is "rooted in a perfect alignment” between shareholders, the company's board and the CEO – but noted that "different views” had emerged in recent weeks, resulting in the decision to approve Tavares' resignation.
Elkann, the chairperson of Stellantis' board, thanked Tavares for "his years of dedicated service and the role he has played in the creation of Stellantis” in an additional statement. He added that he looks forward to appointing a new CEO.
Elkann is the scion of the Agnelli family which founded Fiat and is the top Stellantis shareholder through its investment company EXOR. Other big shareholders include the Peugeot family and the French government, through public investment bank BPIfrance.
Jeff Laethem, who owns a Stellantis dealership in Detroit, said he was relieved at the news of Tavares' resignation. The last year has been punishing for him as inventory has built up and sales of once-dependable vehicles dropped.
"It couldn't get worse," Laethem said, adding his nearby GM dealership has not faced the same challenges.
Stellantis dealers have become more vocal with their displeasure in the last few months, sending a letter outlining their concerns to Tavares in September. Sales of the automaker's vehicles through the third quarter of this year were down 17% in the U.S. compared to the year-ago period, with significant losses across the Dodge, Ram, Jeep, and Chrysler brands.
The company has been struggling to sell even 2023 model-year cars, data provided to Reuters by car-shopping app CoPilot shows.
There are 112 days of supply on dealer lots of Ram 1500 pickup trucks and Jeep Wagoneers, CoPilot data shows, about 20 days higher than their respective rivals, the Chevrolet Silverado and Ford Expedition.
A source familiar with the matter told Reuters that tensions grew after the board felt Tavares was moving too quickly and focusing on near-term solutions to save his reputation, not working in the best interests of the company.
The sudden announcement on Sunday indicated that the fissures between the board and Tavares had to be severe, given that the parties decided it was better to operate with no CEO on a short-term basis, Bernstein analysts said.
Fabio Caldato, a portfolio manager at AcomeA SGR, which holds Stellantis shares, said "new ideas and fresh forces are needed to plan the company's future."
The company has 14 brands, and Tavares warned underperformers among the portfolio were at risk of being axed.
"Tavares is leaving behind a mess of painful layoffs and overpriced vehicles sitting on dealership lots," UAW President Shawn Fain said in a statement.
