The CEO who presided over the merger of Fiat Chrysler Automobiles (FCA) and Groupe PSA has quit ahead of schedule.
The board of automotive giant Stellantis, chaired by John Elkann, confirmed overnight it had accepted CEO Carlos Tavares’ resignation with immediate effect.
“Stellantis’ success since its creation has been rooted in a perfect alignment between the reference shareholders, the Board and the CEO,” said Stellantis senior independent director Henri de Castries.
“However, in recent weeks different views have emerged which have resulted in the Board and the CEO coming to today’s decision.”
It’s unclear what these disagreements concerned.
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Carlos Tavares
The company says the process to appoint a permanent CEO, managed by a Special Committee of the Board, is “well under way” and will be concluded within the first half of 2025.
In the interim, an interim executive committee chaired by John Elkann will man the ship.
“Our thanks go to Carlos for his years of dedicated service and the role he has played in the creation of Stellantis, in addition to the previous turnarounds of PSA and Opel, setting us on the path to becoming a global leader in our industry,” said Mr Elkann.
“I look forward to working with our new Interim Executive Committee, supported by all our Stellantis colleagues, as we complete the process of appointing our new CEO.
“Together we will ensure the continued deployment of the Company’s strategy in the long-term interests of Stellantis and all of its stakeholders.”
Mr Tavares announced his retirement in October, though he had been set to stay until his term ended early in 2026. A successor was set to be appointed by the fourth quarter of 2025.
This followed just weeks after Stellantis cut its 2024 profit forecast, warning it now expected negative cash flow of between €5 billion and €10 billion (~A$8.1-16.2bn). It had previously expected positive cash flow.
Stellantis’ net profit fell by 48 per cent in the first half of 2024 compared to the first half of 2023, with adjusted operating income dropping by €5.7 billion to €8.5 billion (~A$9.2-13.8bn).
The announcement of Mr Tavares’ retirement also came just days after a reshuffling of its leadership, which saw CFO Natalie Knight leave the company.
Although Mr Tavares had been praised for ensuring strong profits from Stellantis in 2022, the first full year of the conglomerate, and an even higher profit figure in 2023, he had recently weathered criticism for his handling of the carmaker’s US operations – traditionally a key profit centre.
In an open letter to Mr Tavares, Stellantis National Dealer Council chairman Kevin Farrish – who runs a Jeep, Ram, Dodge and Chrysler dealership in Virginia – accused the company of ignoring warnings which has led to “disaster” for all involved.
“For over two years now, the US Stellantis National Dealer Council has been sounding this alarm to your US executive team, warning them that the course you had set for Stellantis in the US was going to be a disaster in the long run,” said Mr Farrish in the letter.
“A disaster not just for us, but for everyone involved – and now, that disaster has arrived.
“In 2023, you engineered a record year of profitability for Stellantis, earning you the title of the highest-compensated automotive CEO. You personally earned a record amount of almost US$40 million (A$59.6 million) that year.
“Unfortunately, the engineering and structuring of that year have led us to exactly where we told your executives we would be today. The reckless short-term decision-making to secure record profits in 2023 has had devastating, yet entirely predictable, consequences in the US market.
“Those consequences include the rapid degradation of our iconic American brands – brands like Jeep, Dodge, Ram, and Chrysler that have over a century of history in America.
“The market share of your brands has been slashed nearly in half, Stellantis stock price is tumbling, plants are closing, layoffs are rampant, and key executives fleeing the company. Investor lawsuits, supplier lawsuits, strikes – the fallout is mounting. Your own distribution network, your dealer body, has been left in an anaemic and diminished state.”
Though Mr Farrish didn’t call for Mr Tavares’ resignation, that’s precisely what has happened – even after Stellantis’ US division pushed back on the dealer council chief’s letter, calling it a “personal attack”.
Stellantis recently developed an action plan for the US that included increased incentives on 2024 and older model year vehicles there to help clear the glut of stock.
Mr Tavares had been appointed CEO and chairman of Groupe PSA in 2014, and was praised for acquiring Opel from General Motors and returning it to profitability. He assumed the role of CEO of Stellantis when Groupe PSA merged with FCA.
Prior to his tenure at PSA, he had worked at both Nissan and Renault, becoming chief operating officer – the number two executive under Carlos Ghosn – of the latter in 2011 before resigning in 2013.
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