Jamie Spencer
Stellantis CEO Carlos Tavares resigned unexpectedly on Sunday following growing “differences” with the automaker’s board of directors. Stellantis, the world’s fourth-largest carmaker, announced that Tavares’ resignation is effective immediately.
The company has initiated a search for a new CEO, expecting to conclude the process in the first half of 2025. In the interim, Chairman John Elkann will lead a newly established executive committee.
Henri de Castries, Stellantis’ senior independent director, emphasized the alignment that had existed between shareholders, the board, and Tavares but noted that recent divergent views necessitated the decision.
Stock Reaction and Market Concerns
The resignation has rattled investors, with U.S.-traded Stellantis shares dropping roughly 7% in premarket trading Monday. Before the announcement, the stock had already declined about 43% in 2024.
Analysts expressed concern over the leadership vacuum. Bernstein analyst Daniel Roeska remarked, “The market will inevitably ask why the Stellantis board considered not having a permanent CEO preferable to keeping the current one.”
A Legacy of Mixed Success
Tavares, who joined Stellantis as CEO in 2021 after orchestrating the Fiat Chrysler Automobiles-PSA Groupe merger, was initially celebrated for creating a highly profitable global automaker. However, recent financial and operational missteps undermined his credibility.
The automaker’s North American division, a primary cash generator, has faced challenges such as minimal investment in new products, high pricing, and aggressive cost-cutting. These issues contributed to Stellantis lowering its annual guidance targets and reporting a 27% decline in third-quarter revenue.
Cost-Cutting and Controversies
Tavares implemented sweeping cost-reduction measures, achieving self-reported savings of €8.4 billion since the merger. These included headcount reductions and supply chain optimizations. However, critics—ranging from executives to unions—argued that the cuts were excessive and damaged operations, particularly in the U.S.
Stellantis reduced its workforce by 15.5% (47,500 employees) between 2019 and 2023. Additional layoffs this year in the U.S. and Italy have provoked backlash from unions and UAW members, who have called for Tavares’ removal.
Union Reaction and Leadership Transition
UAW President Shawn Fain welcomed Tavares’ resignation, describing it as a “major step in the right direction” for Stellantis and its workers.
In the interim, the new executive committee led by Elkann will manage Stellantis, while the company continues its search for a permanent CEO.
Looking Ahead
Stellantis faces significant challenges, including rebuilding investor confidence, addressing operational inefficiencies, and stabilizing its U.S. market presence. The leadership transition will play a crucial role in determining the automaker’s ability to navigate these hurdles.
