A quiet holiday weekend produced a massive surprise in the automotive industry when Stellantis CEO Carlos resigned a year early. Tavares was a man who was supposed to lead Stellantis into a new golden age but the company soon fell on hard times with Stellantis facing a massive exodus of customers in the U.S. market as sales tanked and other problems rapidly emerged.
Tavares steps out as Stellantis struggles
The board accepted Tavares’s resignation Sunday night and it ends a very controversial reign for the CEO. The resignation was effective immediatly but Stellantis says that the process to appoint a new CEO was “well underway” hinting that the board was fed up with Tavares and his handling of some of the company’s more pressing problems and could have perhaps pressured the CEO to resign early.
While this process is going on, an interim executive committee led by chairman John Elkann will take command and Stellantis said this will be the case until the company concludes its search for a CEO early next year.
“Stellantis’ success since its creation has been rooted in a perfect alignment between the reference shareholders, the Board and the CEO. However, in recent weeks different views have emerged which have resulted in the Board and the CEO coming to today’s decision,” Henri de Castries, Stellantis’ senior independent director, said in a release.
Tavares’s exit comes as Stellantisis navigating through a full-blown crisis with sales sliding and the brand’s stock off by over 7% after Tavares announced he was leaving. The slide in sales has been especially prevalent in the U.S. where botched allocations of trim levels led to an overabundance of higher trim-equipped vehicles with these models causing many customers to be effectively priced out with the average Stellantis vehicle having a starting price of well over $50,000. Ram and Jeep sales have been hit the most with Jeep seeing sales plummeting with the launch of the ultra-luxurious Commander doing little to spice up sales.
Tavares shaped Stellantis from the start
Prior to his exit, Tavares led the company from the beginning when it was created through a merger between PSA Groupe and Fiat Chrysler Automobiles in 2021. Initially Tavares (a protege of former Nissan CEO Carlos Ghosn) was viewed in a favorable light due to him steering the company into strong growth and profits after spearheading the merger. Stellantis also has the largest umbrella of brands in the industry with Tavares saying in the past that each one would be given the chance to grow which was especially good news for struggling brands like Fiat, Alfa Romeo, and Chrysler.
This initially seemed like a good blueprint, but things hit the skids and subsequently fell apart this year when flagging sales and other issues caught up to the CEO and the company. “The credibility of Carlos Tavares had been massively undermined by the collapse in profitability in Stellantis’ North American operations which had caused the group to slash its 2024 guidance on 30 September,” Bernstein’s Roeska said.
Tavares tried his best to stop the financial bleeding with the CEO enacting a series of cost-cutting measures that slashed 8.4 billion in costs. These measures included the revamp of its supply chain, layoffs in the U.S. and Canada, and an increased reliance in lower-cost labor in countries like Mexico. However, the cost-cutting also enraged the United Auto Workers (UAW) who called for Tavares to resign after the company announced layoffs for several plants in the U.S.
What’s next?
It remains to be seen what’s next for the company following Tavares’s exit. The search for a CEO will take a considerable amount of time and the lack of a discernible head of leadership could leave Stellantis rudderless at a time when it needs a good hand on the steering wheel to help it solve all of its problems. That includes the launch of its lineup of all-electric vehicles with Stellantis already announcing delays for the launches of the Wagoneer S and the Charger EV with the Ram 1500 REV and its extended-range counterpart also being pushed back. The chaos in the executive ranks will not help in this regard and could contribute to more internal chaos.
Carl Malek has been an automotive journalist for over 10 years. First starting out as a freelance photographer before making the transition to writing during college, his work has appeared on numerous automotive forums as well as websites such as Autoshopper.com.
Carl is also a big fan of British vehicles with the bulk of his devotion going to the Morgan Motor Company as well as offerings from Lotus, MG, and Caterham. When he is not writing about automobiles, Carl enjoys spending time with his family and friends in the Metro Detroit area, as well as spending time with his adorable pets.