Tavares Out at Stellantis: CEO Departs Amid Sales Slump and Internal Unrest
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Weeks after a public clash with the board of directors, Carlos Tavares, the hard-driving CEO who led Stellantis through a successful merger and electric vehicle transition, has resigned.
The abrupt departure comes as the auto giant faces a series of deepening challenges, including declining sales in key markets and growing concerns over production cuts and factory closures.
Tavares, who engineered the merger of PSA Group (Peugeot-Citroën) and Fiat Chrysler Automobiles (FCA) in 2021, had built a reputation as a cost-cutting champion but his relentless focus on profit margins drew criticism from employees and unions.
His ambitious “double-digit” operating margin target for the year proved unattainable as the group’s profits halved in the first half of 2024.
The board of directors elected John Elkann, heir to the Agnelli family, which controls Stellantis via its stake in Exor, as its new temporary leader.
Turbulence on the Horizon
The decision to oust Tavares comes after months of growing tension behind the scenes. The former CEO had already announced he would retire at the beginning of October, but the timing of his actual departure suggests a more dramatic split.
“Different points of view” emerged between the management and the board, explained Henri de Castries, a board administrator.
The specifics of the disagreements remain unclear, but internal sources suggest concerns over the direction of the company. Conversely, Tavares’s recent comments highlight his unwavering confidence in his strategy despite growing skepticism from some divisions of the board.
“The company’s board of directors, meeting today under the chairmanship of John Elkann, accepted the resignation of Carlos Tavares,” peeked this symbolic press release, emphasizing the formality and abruptness of the situation.
The silver lining for Stellantis is that a succession plan appears to be in motion. A special committee of the board is fitting a new CEO, a process expected to be completed by the first half of 2025.
Selling Off the Electric Dream?
Tavares’s departure comes at a pivotal stage for Stellantis.
The group had aggressively embraced the electric vehicle revolution, aiming to electrify its entire lineup. It had previously €30 billion in investments on electrification, leading to a strong early presence in the electric vehicle market.
However, recent sales figures paint a different picture.
Criticism of the quality and price points of certain Stellantis electric models has grown in the past few months, particularly in the US尻 where the company is facing fierce competition. Tavares’s insistence on high margins may have hampered its ability to adjust pricing to be more competitive.
This commercial slump is palpable.
In North America, where Stellantis previously enjoyed success, the declining quality and high cost of their vehicles are drawing particular criticism and driving shoppers away.
Future in Focus
Tavares’s successor will face a multitude of challenges.
Maintaining Stellantis as a leading global automaker while navigating an evolving market will require a delicate balancing act.
Meanwhile, concerns about future production cuts and even factory closures have raised anxieties among employees, particularly in Europe.
While management has officially promised in France that there are no immediate factory shutdowns planned despite the potential decrease in production, the company recently confirmed the closure of its plant in Luton, United Kingdom, leading to over 1,100 job losses. The plant ceasing operations casts a shadow over a workforce doubting the company’s commitment to its employees, feeling unsure about the future.
The success of Stellantis relies heavily on finding a leader who can effectively address these concerns and convince stakeholders that the car giant has a clear roadmap for future success.
What caused Carlos Tavares’s resignation from Stellantis?
## Interview with Automotive Analyst, Jane Smith
**Interviewer:** Joining us today is renowned automotive analyst Jane Smith to discuss the shocking resignation of Carlos Tavares, CEO of Stellantis. Jane, what are your initial thoughts on this news?
**Jane Smith:** This is indeed a seismic shift in the automotive world. Tavares was a powerful figure who steered Stellantis through a complex merger and helped them make significant strides in electric vehicles. His departure amidst falling profits and internal strife signals deep trouble for the company.
**Interviewer:** What specifically do you think led to this sudden resignation?
**Jane Smith:** The writing has been on the wall for a while. Tavares’ aggressive cost-cutting measures, while successful initially, sparked significant unrest amongst employees and unions. His focus on achieving ambitious profit margins seemed to have blinded him to growing concerns about declining sales, particularly in North America. Clearly, a clash of visions with the board of directors was brewing, and it culminated in this dramatic exit. [[1](https://www.nytimes.com/2024/12/01/business/stellantis-ceo-resigns.html)]
**Interviewer:** What does Tavares’ resignation mean for Stellantis going forward?
**Jane Smith:** Uncertainty reigns. The announcement of a temporary leadership under John Elkann offers little clarity. The immediate challenge is finding a new CEO who can stabilize the company, appease stakeholders, and address the core issues of declining sales and production cuts. What happens to Stellantis’ electric vehicle ambitions remains a key question.
**Interviewer:**
Do you think the board will stick to Tavares’ ambitious electric vehicle roadmap?
**Jane Smith:** That’s the million-dollar question. Tavares was adamant about transitioning to EVs, but some board members seem more cautious given the current financial climate. It wouldn’t surprise me if there’s a scaling back of some EV plans, at least until the new CEO lays out a revised strategy.
**Interviewer:** Thank you for your insightful analysis, Jane. This is a developing story that we will continue to follow closely.
