Stellantis CEO Carlos Tavares resigned unexpectedly on Sunday, the automaker saying “different views have emerged” in recent weeks as the Euro-American automaker struggled to come up with a way to reverse weakened sales and earnings. No immediate successor was named, though it appears that the automaker’s Chairman John Elkann effectively will take control until a replacement is named. This is a breaking story. Headlight.News will have a longer analysis shortly.
Tavares was counting on the launch of new products, such as the Ram 1500 REV, to help revive Stellantis’s fortunes in 2025.
Facing increasing criticism for the company’s weak sales and earnings this past year, Carlos Tavares has resigned as chief executive officer at Stellantis N.V.
His departure was not expected by even close observers, a position echoed by the 5-paragraph statement issued by the automaker which noted that no successor is in place, a new CEO not expected to be named until sometime “in the first half of 2025.”
“Stellantis’ success since its creation has been rooted in a perfect alignment between the reference shareholders, the Board and the CEO,” Senior Independent Director, Henri de Castries said in the statement. “However, in recent weeks different views have emerged which have resulted in the Board and the CEO coming to today’s decision.”
What went wrong?
Warren Truck Assembly Plant Manager Andy Ragalyi (left) showed off the plant to Stellantis CEO Carlos Tavares (center) during a tour last July.
The once-promising merger of Fiat Chrysler Automobiles and France’s Groupe PSA hasn’t been going as planned. Net profits at Stellantis were off by nearly 50% for the first half of this year, largely due to a slump in North American sales. In September Stellantis lowered its full-year guidance, net revenue subsequently falling 27% year-over-year for the third quarter.
A variety of factors caught blame, including delayed product launches, aggressive pricing that failed to consider growing consumer resistance, and increasingly bloated inventories. In June, Tavares himself admitted his own “arrogance” led him to miss some of the warning signs.
Whatever the reason, the company has been forced to offer big price cuts and incentives, even as it’s trimmed production at the two brands that have traditionally provided its biggest profits: Jeep and Ram. In turn, it has announced a series of layoff impacting thousands of U.S. employees.
What now?
Though he had previously been expected to continue with Stellantis indefinitely, the 66-year-old Tavares and the board announced in September that he would retire when his current contract expire in 2026. He is now stepping down immediately, the automaker said.
CEO Carlos Tavares earlier this year acknowledged his own “arrogance” may have delayed the response to declining sales and earnings.
“I didn’t expect this. It’s not the timeline they originally announced,” said Stephanie Brinley, principal auto analyst with S&P Global Mobility.
The fact that it could take until sometime in 2025 to find a replacement for Tavares underscores the fact that the C-level shake-up was not anticipated ahead of a Stellantis board meeting that extended into this weekend, suggested Brinley.
In the meantime, the company stated, “a new Interim Executive Committee, chaired by John Elkann, will be established.” Elkann is an heir to the Fiat fortune. He became chairman when the Italian automaker merged to become part of Fiat Chrysler Automobiles and retained that role when FCA subsequently merged with France’s Groupe PSA to form Stellantis on January 1, 2021.
Headlight.News will follow shortly with a longer analysis of the unexpected Stellantis shake-up.
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