Stellantis chief executive Carlos Tavares resigns

Stellantis chief executive Carlos Tavares has resigned following a sharp decline in monetary act at the globe’s fourth-largest carmaker, marking an abrupt exit for one of the automotive industry’s most high-profile leaders.

In a statement on Sunday, Stellantis, which owns the Peugeot, Fiat and Jeep brands, said the corporation’s board accepted the resignation of Tavares, without explaining exactly why he had stepped down. 

In September, Stellantis had launched a search for a successor to Tavares, but he had been expected to complete his term as chief executive through until early 2026.

Tavares joined France’s Peugeot owner PSA in 2014, saved it from near insolvency, and then helped forge Stellantis by buying Germany-based Opel from General Motors in 2017. A €50bn union with Fiat-Chrysler followed in 2021.

John Elkann, Stellantis’ chair, said “our thanks goes to Carlos for his years of dedicated service and the role he has played in the creation of Stellantis”.

The corporation said the procedure to appoint a recent chief executive would be concluded by the first half of 2025. Until then, a recent interim executive committee led by Elkann will be formed.

Henri de Castries, Stellantis’ elder independent director, said the corporation’s achievement had been rooted in “perfect alignment” between its shareholders, board and chief executive.

“However, in recent weeks different views have emerged which have resulted in the board and the CEO coming to today’s selection,” he added.

People familiar with Tavares’ departure said there were increasing tensions between him and other Stellantis board members on how to put the corporation back on track following a steep decline in reported profits in 2024 due to slumping sales in the US and Europe. Stellantis’ shares have fallen 43 per cent this year.

“[Tavares] was focusing on the short term rather than the throng’s longer term and managed to rage everybody in the procedure,” said one person familiar with conversations among the Stellantis board members. 

A second person with knowledge of the deliberations added: “There was a sense that Carlos was moving too quick to retrieve his reputation at the hazard of creating problems in the upcoming.”

Stellantis, which built a powerful equilibrium sheet through sweeping expense cuts, in September issued a boost warning. The corporation said at the period its free liquid assets flow would be negative in 2024, in the range of €5bn to €10bn.

Another person briefed on Tavares’ resignation said the circumstance inside Stellantis and with the corporation’s stakeholders, including suppliers and dealers in the US, had become strained.

Disgruntled factory workers in Italy and the US had threatened strikes following production cuts.

Tavares did not immediately respond to a request for comment. information he was stepping down as Stellantis’ chief executive was first reported by Bloomberg.

Stellantis on Sunday confirmed its 2024 monetary guidance, including its target for an adjusted operating boost spread of 5.5 per cent to 7 per cent.

Bernstein analyst Daniel Roeska said Elkann has shown “excellent instincts” in the history when choosing a recent chief executive.

He added: “We would expect that the board will be looking at a mix of internal and external candidates, but the interim period will be challenging for the corporation’s management and investors alike.”

In July Tavares had brushed off concerns about Stellantis’ act, describing the slump in sales as a “bump in the road” as he vowed to “fix” the problems. 

In October he oversaw a management shake up at the corporation’s brands, including Jeep, Maserati and Alfa Romeo.

The changes were interpreted by analysts as a sign Tavares was not planning to step down before the complete of his term. 

At the period he also clashed with the Italian government over electric vehicle subsidies, as he threatened to shift some Stellantis jobs at its Italian factories to locations overseas.

Tavares was grilled by angry Italian lawmakers, and his response blaming the tough regulatory surroundings was taken as lacking in “modesty”, said one person familiar with the matter.

Tavares’ departure comes just days after Stellantis announced it was suspending production of the Fiat 500 EV and two Maserati models at its historic Mirafiori plant in Turin during December due to frail demand.

Last week Stellantis blamed the UK’s electric vehicle sales rules as it announced plans to shut its van factory in Luton, putting about 1,100 jobs at hazard.