Stellantis NV CEO Carlos Tavares speaks to the media at the Stellantis automotive manufacturing plant in Sochaux, France, Thursday, October 3, 2024.
Nathan Lane | Bloomberg | Getty Images
Detroit- star Chief Executive Carlos Tavares unexpectedly resigned from the automaker amid growing “disagreements” between executives and the board, the company said on Sunday.
The world’s fourth-largest automaker said its board accepted Tavares’ resignation on Sunday. His departure is effective immediately.
Jeep maker Stellantis said the process to appoint a new chief executive is “well underway” and it expects to complete the selection in the first half of next year. Before that, the company said it would form a new interim executive committee led by Chairman John Elkann.
“Stellantis’s success since its creation has been rooted in the perfect synergy between shareholders, the Board of Directors and the CEO. However, different perspectives have emerged in recent weeks, leading the Board and CEO to take today’s decision,” Henri de Castries, Senior Independent Director of Stellantis, said in a press release.
A Stellantis spokesman declined to disclose any other information about the resignation.
Tavares’ resignation comes less than two months after the company announced he would retire at the end of his contract in early 2026.
Stellantis Stock in 2024
Tavares has led Stellantis since its merger in 2021 with Fiat Chrysler Automobiles NV and PSA Group, where he has chaired the board of directors since 2014.
The auto industry veteran is the brainchild of former Nissan executive Carlos Ghosn and has been widely praised in recent years for spearheading the merger that turned Stellantis into one of the world’s most profitable automakers.
But this year, the company’s financial results fell significantly short of expectations due to mismanagement of the U.S. market (its main source of cash), a lack of investment in new or updated products, historically high prices, and extreme cost-cutting measures.
The company, which also owns the Dodge, Fiat, Chrysler and Peugeot brands, lowered its annual guidance in September, a month before the automaker reported a 27% drop in third-quarter net income.
Stellantis has also struggled with sales this year. Recently, the company reported Approximately 20% drop Global auto sales increased in the third quarter compared with the same period last year. This included Tavares’s years-long free fall in the United States, despite his attempts to correct what he called “arrogant” mistakes.
By 2024, the company’s U.S.-listed shares will fall about 43%.
Tavares has made cost cutting a key mission for Stellantis, which included a self-reported consolidated cost reduction of 8.4 billion euros ($9 billion).
Cost-saving measures include reshaping the company’s supply chain and operations, as well as reducing the number of employees in the United States and increasing workloads in lower-cost countries such as Brazil and Mexico.
Several current and former Stellantis executives have previously told CNBC that the spending cuts have gone too far and are causing problems in the United States.
Tavares disputed the suggestion that the company’s massive cost-cutting efforts had caused problems.
“When you don’t deliver on a promise for whatever reason … you might want to find a scapegoat. It’s easy to cut the budget. It’s wrong,” Tavares said in July.
According to public documents, from December 2019 to the end of 2023, Stellantis has laid off 15.5% of its employees, or about 47,500 employees. Additional layoffs in the U.S. and Italy this year involving thousands of factory workers have sparked outrage from unions in both countries.
The United Auto Workers union has been calling for Tavares to step down for months as its members face layoffs and production cuts. Stellantis’ U.S. dealer network has also spoken out against Tavares, saying the company lacks the financial backing to sell the vehicles due to excess inventory.
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