Stellantis CEO Carlos Tavares resigns due to problems in the US

DETROIT – Stellantis Chief Executive Officer Carlos Tavares has unexpectedly resigned from the automaker amid growing “differences of views” between senior management and the board, the company said on Sunday.

The world’s fourth-largest automaker said its board accepted Tavares’ resignation on Sunday. His resignation is effective immediately.

Jeep maker Stellantis said its process to appoint a new CEO is “well underway” and it expects to complete the search in the first half of next year. Until then, the company announced it would establish a new interim executive committee led by chairman John Elkann.

“The success of Stellantis since its inception has been based on perfect coordination between the reference shareholders, the Board of Directors and the CEO. However, in recent weeks, different views have emerged that have led the board and CEO to reach today’s decision,” Henri de Castries, the lead independent director of Stellantis, said in a press release.

A Stellantis spokesman declined to provide further information about the resignation.

The automaker’s U.S.-traded shares fell about 8% in premarket trading on Monday. Before the resignation, the stock lost about 43% in 2024.

“The market will inevitably ask why the Stellantis board felt that not having a permanent CEO for several months was better than keeping the current CEO in place,” Bernstein analyst Daniel Roeska said on Sunday evening in an investor announcement. “We find it difficult to identify a scenario in which these events could have a positive impact on the share price.”

Tavares’ resignation comes less than two months after the company announced he would retire at the end of his contract in early 2026. At the time, Stellantis said it planned to name a replacement by the fourth quarter of next year.

Tavares has led Stellantis since its founding through a merger between Fiat Chrysler Automobiles and PSA Groupe in 2021, where he has been CEO since 2014.

The longtime automotive veteran – a prodigy of former Nissan executive Carlos Ghosn – has been widely praised in recent years for leading the merger and turning Stellantis into one of the world’s most profitable automakers.

But this year, the company’s financial results have fallen significantly short of expectations due to poor management of the U.S. market – its main money maker – lack of investment in new or updated products, historically high prices and extreme cost-cutting measures.

The company, which also owns brands such as Dodge, Fiat, Chrysler and Peugeot, cut its full-year forecasts in September, a month before the automaker reported a 27% decline in net sales in the third quarter.

“Carlos Tavares’ credibility was massively undermined by the collapse in profitability at Stellantis’ North American operations, which led the group to lower its 2024 forecast on September 30,” said Bernstein’s Roeska.

Stellantis’ sales also struggled this year. The company most recently reported a roughly 20% year-over-year decline in global vehicle sales in the third quarter. That included extending a years-long free fall in the United States, even as Tavares tried to correct what he called “arrogant” mistakes.

Tavares made cost-cutting a key task for Stellantis, including what it said was 8.4 billion euros ($9 billion) in savings from the merger.

Cost-saving measures included redesigning the company’s supply chain and operations, as well as reducing headcount in the U.S. and expanding work in lower-cost countries such as Brazil and Mexico.

Several current and former Stellantis executives, speaking on condition of anonymity because of possible repercussions, previously described the cuts to CNBC as grueling to the point of hyperbole and causing problems in the U.S

Tavares dismissed claims that the company’s massive cost-cutting efforts had created problems.

“If you don’t deliver for some reason…you might want to use a scapegoat. Cutting the budget is a simple matter. It’s wrong,” Tavares said in July.

Between December 2019 and the end of 2023, Stellantis reduced headcount by 15.5%, or approximately 47,500 employees, according to public filings. Further job cuts this year, affecting thousands of factory 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’ resignation for several months as its members face layoffs and production cuts. Stellantis’ US dealer network has also spoken out against Tavares, citing bloated inventories and the company’s lack of financial support for vehicle sales.

UAW President Shawn Fain welcomed Tavares’ resignation in a statement Sunday evening, calling it a “big step in the right direction for a company.”

“Thousands of UAW members at Stellantis have demanded that the company fire Carlos Tavares for his reckless mismanagement of the company,” Fain said. “We are pleased that the company is responding to the pressure and correcting course.”