Stellantis chief executive Carlos Tavares resigns

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Stellantis chief executive Carlos Tavares has resigned following a sharp decline in financial performance at the world’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 company’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 merger 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 company said the process to appoint a new chief executive would be concluded by the first half of 2025. Until then, a new interim executive committee led by Elkann will be formed.

Henri de Castries, Stellantis’ senior independent director, said the company’s success 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 decision,” he added.

People familiar with Tavares’ departure said there were increasing tensions between him and other Stellantis board members on how to put the company 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 group’s longer term and managed to anger everybody in the process,” 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 fast to retrieve his reputation at the risk of creating problems in the future.”

Stellantis, which built a strong balance sheet through sweeping cost cuts, in September issued a profit warning. The company said at the time its free cash flow would be negative in 2024, in the range of €5bn to €10bn.

Another person briefed on Tavares’ resignation said the situation inside Stellantis and with the company’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. News he was stepping down as Stellantis’ chief executive was first reported by Bloomberg.

Stellantis on Sunday confirmed its 2024 financial guidance, including its target for an adjusted operating profit margin of 5.5 per cent to 7 per cent.

Bernstein analyst Daniel Roeska said Elkann has shown “good instincts” in the past when choosing a new 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 difficult for the company’s management and investors alike.”

In July Tavares had brushed off concerns about Stellantis’ performance, 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 company’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 end of his term. 

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

Tavares was grilled by angry Italian lawmakers, and his response blaming the tough regulatory environment was taken as lacking in “humility”, 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 weak 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 risk.