Facing mounting criticism for the automaker’s recent plunge in sales and earnings, Stellantis CEO Carlos Tavares will retire in 2026. The announcement comes amidst a major shakeup in the automaker’s Euro-American management team.
Developing EVs like the Ram 1500 have strained the Stellantis budget. CEO Tavares is seen at the left.
The architect of the merger that combined Fiat Chrysler Automotive and the PSA Group into the industry giant Stellantis will step down — though not until 2026, which may not be enough to satisfy the growing chorus of critics who fault CEO Carlos Tavares for the automakers sharp decline in sales and earnings.
A successor is expected to be announced by the fourth quarter of 2025, with a special committee now being set up to begin the search process.
While the 66-year-old Tavares will, for now, remain at the helm of the troubled Stellantis there will be significant changes elsewhere in the company’s management structure. Among other moves, Jeep boss Antonio Filosa becomes the new COO of North American operations. That’s the region that has been giving Stellantis – and Tavares — its biggest headaches as sales by the company’s two powerhouse brands, Jeep and Ram, continue to tumble.
An unexpected stumble
Demand for Jeep products, like this Wrangler Rubicon, has fallen sharply over the past 18 months.
Only a few years ago, Tavares was hailed as one of the most effective senior executives in the global auto industry. The Portugese-born executive spent more than three decades with Peugeot before moving to the struggling French rival Peugeot in 2014. His cost-cutting and other measures quickly helped return it to profitability. Tavares proved equally effective when the PSA Group purchased money-losing Opel/Vauxhall from General Motors, putting it back in the black within a year.
Tavares’ biggest gamble came with the January 2021 Merger of FCA and PSA to form Stellantis, immediately positioning it as the world’s fourth-largest automaker by sales volume. For the first two years, the deal was hailed as a major success, Tavares reporting sizable savings from combining R&D, marketing and manufacturing operations.
But the fabric began to fray during the second half of 2023, even as the industry, overall, began to recover from the impact of the COVID pandemic. Even as the automaker’s inventory has grown it has seen a sharp drop in sales, especially in the North American market. For the third quarter volume fell 20% due to declining demand, primarily for Jeep and Ram products. It was the first consecutive quarterly decline.
Tavares pleads “arrogance”
CEO Carlos Tavares earlier this year acknowledged his own “arrogance” may have delayed the response to declining sales and earnings.
A variety of factors have been blamed for the downturn, though Tavares pointed the finger at himself earlier this year, suggesting his own “arrogance” led him to miss some of the issues that should have been addressed earlier on.
Whatever the reason, the downturn has hammered the Stellantis bottom line. Not only have earnings tumbled for the first nine months of the year but, on September 30, the automaker cut its 2024 profit forecast while warning it could be experiencing negative cash flow of as much as 10 billion Euros – about $11.2 billion.
Investors have responded warily, driving Stellantis shares down from a March peak of $29.51 to a 52-week low of $12.74 this week. Investors appeared to welcome the announcements made today, however, shares rising slightly in morning trading.
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Management shake-up
Jeep CEO Antonio Filosa will now become COO of the North American region.
There have been growing calls for Tavares to step down as the problems at Stellantis continue to mount. For now, however, the executive plans to remain at his post through the end of his current contract in early 2026.
Stellantis Chairman John Elkann previously announced the start of a search effort that could lead to a replacement at that time, though it remained possible that Tavares could remain on even then. At this point, however, he will clearly depart at the end of the current contract. A successor, Stellantis officials said, will be announced by the end of 2025.
Even as Tavares soldiers on, Stellantis will see a number of senior executive changes, especially in the North American region. The most significant move involves Filosa, who was appointed head of Jeep earlier this year. He replaced former boss Jim Morrison, one of several senior execs to leave the company during an earlier shake-up. Filosa will now serve as North American COO.
The latest management moves see Doug Ostermann named the new Stellantis finance chief. Santo Ficili will now both Alfa Romeo and Maserati. And there will be changes at the top of both the Chinese and European regions.
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