Tavares resigns as Stellantis CEO after company struggles for months
Eric D. Lawrence, Detroit Free Press
6 min read
Carlos Tavares is out as CEO of Stellantis, capping an almost four-year run as head of the company that owns Jeep, Ram, Chrysler, Dodge and Fiat.
Tavares’ resignation was announced Sunday in a company news release.
The timing of the announcement came as a surprise, though Tavares' departure was planned in a year.
Tavares, who has led the company since it formed in January 2021 from the merger of Peugeot maker PSA Group and Fiat Chrysler Automobiles, has been under increasing pressure for months as the automaker has struggled. His expected retirement, along with a search for a replacement, had previously been announced.
Stellantis' struggles, including a stock price that's less than half what it was earlier this year, likely weighed heavily on the company's board. In a news release, Henri de Castries, Stellantis’ senior independent director, pointed to divisions at the top of the company.
“Stellantis’ success since its creation has been rooted in a perfect alignment between the reference shareholders, the board and the CEO. However, in recent weeks different views have emerged which have resulted in the board and the CEO coming to today’s decision," he said in the release.
Tavares' resignation was effective immediately, and the process to appoint a new permanent CEO is "well under way," to be concluded within the first half of 2025, according to the release. The company said it would seek to find a replacement CEO in the first half of 2025.
Carlos Tavares resigned Sunday as CEO of Stellantis as the automaker struggles on numerous fronts. A search for his replacement is underway.
"Until then, a new Interim Executive Committee, chaired by John Elkann, will be established," the release said. Elkann is board chairman.
Tavares had enjoyed a reputation as a successful automotive leader until this year, even as he was seen as highly focused on cutting costs. He was credited with turning around Opel after PSA Group bought the brand from General Motors, for instance, but his vague comments about "arrogance" during the Stellantis Investor Day in Auburn Hills in June appear to have changed the narrative around Stellantis, even if cracks in the facade had been evident prior.
Struggles have abounded this year for Stellantis, with excessive inventory, significantly lower sales in the key U.S. market, job cuts, fights with stakeholders and growing political pressure.
The UAW, which had been threatening a nationwide strike against the automaker, even launched a website with a derogatory title calling for Tavares' ouster.
The union and its president, Shawn Fain, had blasted Tavares repeatedly over job cuts and what the union said was the company's failure to live up to its commitments, particularly at the idled Belvidere Assembly Plant in Illinois. After Stellantis announced it would cut a shift at Warren Truck, north of Detroit, Fain said that "if any autoworker did as piss poor of a job as Stellantis CEO Carlos Tavares, they would be fired."
UAW President Shawn Fain speaks during a rally outside of the UAW Local 51 office in Detroit on Wednesday, Oct. 30, 2024, highlighting what the union says is Stellantis' refusal to follow through on the $19 billion in product and investment commitments.
Fain, in a statement, cheered the news of Tavares' resignation.
"The UAW welcomes the resignation of Stellantis CEO Carlos Tavares, a major step in the right direction for a company that has been mismanaged and a workforce that has been mistreated for too long. For weeks, thousands of UAW members at Stellantis have been calling for the company to fire Carlos Tavares due to his reckless mismanagement of the company. We are pleased to see the company responding to pressure and correcting course," Fain said.
"Tavares is leaving behind a mess of painful layoffs and overpriced vehicles sitting on dealership lots," the statement said. "We look forward to new Stellantis leadership that respects hardworking UAW members and is ready to keep its promise to America by investing in the people who build its products."
Fain said the union would use "all means available" to hold the company accountable and enforce its 2023 contract with the company. He said the UAW looks forward to sitting down with the new CEO to discuss "their plan to keep making world-class vehicles here in the United States."
The scope of the criticism, however, has gone well beyond the union. The company's U.S. dealers issued an open letter in September, saying they'd been sounding the alarm for years that the course Tavares had set would lead to disaster in the long run. The company's U.S. electric vehicle offensive, with numerous models slated to be released this year and next also appeared ill-timed as the industry deals with a more complicated EV sales picture than anticipated last year.
In October, Tavares put the blame for the company's U.S. inventory issues on a poor second-quarter marketing plan, noting that “the marketing plan that failed in Q2 was proposed and decided by the region,” even though he said he had seen it and could have stopped it.
More recently, worries about the potential for significant tariffs under the incoming Trump administration have sparked concerns that Stellantis, which has significant operations in both Mexico and Canada, could be particularly exposed.
In an interview with the Free Press last month, incoming U.S. Sen. Bernie Moreno, of Ohio, an ally of President-elect Donald Trump, highlighted how changing political winds might affect the automaker.
"CEO Carlos Tavares needs to understand the United States government is not going to allow him to gut Chrysler, and Jeep, and Dodge, and Ram, and ship those cars and the direction overseas, in managing a company that was handed to them for free, which never should have been done,” Moreno said at the time, referencing the way Chrysler came to be part of Fiat Chrysler Automobiles in connection with the 2009 bankruptcy.
In its news release Sunday, Stellantis said it was confirming its previously announced financial guidance for the year, which had been lowered to an adjusted operating income margin of 5.5-7% and industrial free cash flows down more than $5 billion to $10 billion (5 to 10 billion euros).
Stellantis Chief Financial Officer Doug Ostermann is scheduled for a fireside chat at a Goldman Sachs event on Wednesday.
Sam Fiorani, vice president of global vehicle forecasting for AutoForecast Solutions, predicted that Stellantis' next CEO will not have an easy ride either.
"With Stellantis still trying to digest four combined automakers, heading up the company has to be one of the most difficult positions in the industry. It is an unenviable position and likely one that can't be done without plant closures, brand consolidation, and job cuts. Tavares was destined to be the enemy of the factory workers or the enemy of the stockholders as it was impossible to come out of this with both sides happy. His successor will also face the same issues with the same likely outcomes," Fiorani said.
