Billionaire Fiat heir takes control of Jeep, Ram parent company Stellantis after CEO Carlos Tavares leaves

For the time being, CEO and Fiat heir John Elkann will take his place. In a statement announcing Tavares’ resignation, Stellantis said it had appointed the billionaire scion, effective immediately, to lead a newly formed interim executive committee in addition to his leadership and oversight duties until a successor is found.

“Together we will ensure the continued implementation of the company’s strategy in the long-term interests of Stellantis and all its stakeholders,” Elkann said, the latter likely referring not only to his workforce but also to struggling U.S. dealers.

The carmaker said a special committee of directors would now recruit a permanent replacement for Tavares, adding the search was already “well underway.” This suggests that the question of whether the CEO defected or was pushed out is largely academic, as trust had already been irreparably damaged – a conclusion supported by the wording of the statement.

“Different views have emerged over the last few weeks which have led the board and CEO to reach today’s decision,” Henri de Castries, senior independent director, said in the statement.

It’s a game-changer for Stellantis, which has become the owner of over a dozen car brands including Fiat, Peugeot and Opel thanks to two transformative merger deals over the last decade. Tavares was the architect of the latter, merging France’s PSA with Elkann’s Fiat Chrysler Automobiles in 2019.

The automaker only achieved record annual results at the beginning of the year, but then plunged into a crisis within a few months that culminated in an open revolt by its North American dealers. They clearly blamed the current ex-CEO for the company’s recent problems.

Troubles in the U.S. market are largely the reason Stellantis fell two places in the global vehicle sales rankings this year, coming in sixth so far.

Who is John Elkann?

The 48-year-old traces his ancestry to none other than his great-great-grandfather Giovanni Agnelli, who laid the foundation for the Italian automobile industry when he built the Fabbrica Italiana Automobili Torino, or Fiat for short, in the northern city of Turin in 1899.

No modern Italian dynasty comes closer to royal status than theirs. Since tragedy is a constant companion alongside fame, it has often led to comparisons with the Kennedy dynasty.

In 1997, the nephew of charismatic patriarch Gianni Agnelli died of cancer in his early thirties, leaving the family without a designated successor. Shortly thereafter, Gianni’s only son died, apparently by suicide.

In 2003, Agnelli himself died, and his younger brother Umberto eventually took over the reins, but died just over a year later.

Elkann, the son of Gianni’s daughter Margherita, subsequently took over the family business, having previously joined the Fiat board at just 22 years old. But that wasn’t the end of the family’s confrontation with the tragedy.

His younger brother Lapo, an eccentric playboy and fashionista, almost died of a drug overdose in 2005. More recently, Elkann found himself in the middle of a protracted inheritance legal battle, pitting him directly against his own mother.

Could Elkann continue to lead Stellantis?

Elkann has the necessary skill and experience. Elon Musk may be the longest-serving CEO of a major automaker, but Elkann has been groomed to take care of Fiat since his early 20s.

However, although it is certainly conceivable, it is unlikely.

Much like the Porsches behind Volkswagen or the Quandts who control BMW, Elkann has long shied away from directly running the day-to-day operations of his family’s automotive empire.

Instead, he has entrusted the task to a professional class of managers while he focused on his role as CEO of Exor, the investment vehicle created to preserve and grow the family wealth through the active management of portfolio holdings in sports clubs, newspapers and insurance companies, among others diversify.

A spokesman for Stellantis declined to comment Assets Beyond what was in the company’s press release, he simply said, “Stay tuned” for more details, including the exact composition of the interim executive board.

Tavares was Elkann’s second transformational CEO after Sergio Marchionne, who took advantage of Chrysler’s difficulties to acquire a controlling stake following Chrysler’s bankruptcy in 2008. In 2014, the well-known workaholic and heavy smoker took sole ownership and founded Fiat Chrysler Automobiles. His sudden death four years later from complications of shoulder surgery accelerated the search for a partner who became Tavares’ PSA.

Why did Tavares have to go?

Stellantis shocked the market in September when it announced it would move forward with plans to liquidate a bloated U.S. inventory of bargain-priced vehicles as needed. The resulting reduction in the forecast profit margin revealed larger problems than previously thought.

Earlier this month, traders criticized Tavares for a strategy they said prioritized short-term success at the expense of longer-term problems, just so he could pump up 2023 results and pocket nearly $40 million in compensation – more than anyone other competitors of an old automobile manufacturer.

This time, however, the company was quick to point out that Tavares Elkann wouldn’t leave an even bigger mess for him to clean up. Stellantis confirmed Monday that the company remains on track to meet its revised full-year guidance.

Not that this has boosted investor confidence: The automaker’s shares fell over 8% in European trading and are expected to open significantly lower when the bell rings on New York’s Big Board.

Still, Elkann gave Tavares credit for first rescuing the French automaker behind Peugeot and Citroën before nursing Opel back to health after a generation of mismanagement under previous owner General Motors.

“Our thanks go to Carlos for his years of dedicated service and the role he played in the founding of Stellantis,” said Elkann.

How far are you from the world’s most powerful business leaders? Discover who made our brand new list of the 100 most powerful people in business. Plus, learn more about the metrics we used to create it.