Carlos Tavares, CEO of Stellantis NV, speaks to the media at the Stellantis automobile manufacturing plant in Sochaux, France, on Thursday, October 3, 2024.
Nathan Lane | Bloomberg | Getty Images
DETROIT — Stellantis Chief Executive Officer Carlos Tavares unexpectedly resigned from the automaker amid increasingly “divergent views” between the CEO and the board, the company said on Sunday.
The world's fourth-largest automaker said its board of directors accepted Tavares' resignation on Sunday. His departure is effective immediately.
Jeep maker Stellantis said the process of appointing a new CEO is “well underway” and that it expects to complete the search during the first half of next year. Until then, the company said it will form a new interim executive committee led by Chairman John Elkann.
“The success of Stellantis since its inception has been rooted in complete alignment between the benchmark shareholders, the Board and the CEO. However, in recent weeks different views have emerged that have led to the Board and CEO reaching today’s decision,” said Henry De Castries, the company’s senior independent director. Stellantis, in a statement.
A Stellantis spokesman declined to reveal any additional information regarding the resignation.
Tavares' resignation comes less than two months after the company announced he would retire at the end of his contract in early 2026. At the time, Stellantis said it planned to name a replacement by the fourth quarter of next year.
Stellantis stock in 2024
Tavares has led Stellantis since its inception through the 2021 merger of Fiat Chrysler Automobiles and PSA Groupe, where he has served as Chairman of the Board since 2014.
The veteran auto tycoon — a prodigy of former Nissan CEO Carlos Ghosn — has been widely praised in recent years for spearheading the merger and making Stellantis one of the world's most profitable automakers.
But this year, the company's financial results fell well below expectations amid mismanagement of the US market – its main source of cash – with a lack of investment in new or updated products, historically high prices, and aggressive cost-cutting measures.
The company, which also owns brands such as Dodge, Fiat, Chrysler and Peugeot, cut its annual guidance targets in September, a month before the automaker reported a 27% drop in third-quarter net revenue.
Stellantis sales have also suffered this year. Most recently, the company reported a nearly 20% decline in global vehicles sold during the third quarter year-over-year. This included extending a free fall that had continued for years in the United States despite Tavares' attempts to correct what he described as “arrogant” mistakes.
The company's U.S.-traded shares will fall approximately 43% in 2024.
Tavares has made cutting costs mission critical for Stellantis, including self-reported cuts of €8.4 billion ($9 billion) from the merger.
Cost-saving measures included reconfiguring the company's supply chain and operations, as well as reducing headcount in the United States and increasing work in lower-cost countries such as Brazil and Mexico.
Several current and former Stellantis executives, who spoke on the condition of anonymity because of the potential fallout, previously described the cuts at CNBC as overly burdensome and causing problems in the United States.
Tavares responded to the claim that the company's massive cost-cutting efforts had created problems.
“When you don't deliver for any reason… you might want to use a scapegoat,” Tavares said in July. “Cutting the budget is easy. It's wrong.”
Stellantis reduced headcount by 15.5%, or approximately 47,500 employees, between December 2019 and the end of 2023, according to public filings. Additional job cuts this year involving thousands of factory workers in the United States and Italy have angered unions in both countries.
The United Auto Workers union has been calling for Tavares' dismissal for several months, as its members face layoffs and production cuts. The Stellantis dealer network in the US has also spoken out against Tavares amid bloated inventories and a lack of financial support from the company to sell the vehicles.
