Carlos Tavares, CEO of Stellantis NV, speaks to the media at the Stellantis automobile manufacturing plant in Sochaux, France, Thursday, October 3, 2024.
Nathan Lane | Bloomberg | getty images
Detroit — major CEO Carlos Tavares unexpectedly resigned amid growing “differences” between management and the board, the company said Sunday.
The world’s fourth-largest automaker said its board accepted Tavares’ resignation on Sunday. His departure is effective immediately.
Jeep maker Stellantis said the process to appoint a new CEO is “progressing well” and that it expects to complete the appointment in the first half of next year. Until then, the company said it will form a new interim executive committee led by Chairman John Elkann.
“Stellantis’ success since its inception has been rooted in perfect harmony between its stakeholders, board of directors and CEO. However, in recent weeks divergent views have emerged, leading the board and CEO to take today’s decision,” said Henri. de Castries, Stellantis’ senior independent director, said in a press release:
A Stellantis spokeswoman declined to release any additional information regarding the resignation.
Tavares’ resignation comes less than two months after the company announced he would retire when his contract ends in early 2026. At the time, Stellantis announced that it planned to nominate a replacement by the fourth quarter of next year.
Stellantis stock in 2024
Tavares has served as Chairman of the Board of PSA Groupe since 2014, following the creation of Stellantis through the 2021 merger of Fiat Chrysler Automobiles and PSA Groupe.
The brainchild of Carlos Ghosn, a longtime auto veteran and former Nissan executive, he is widely credited with leading the recent merger and turning Stellantis into one of the world’s most profitable automakers.
However, the company’s financial results this year have seriously missed expectations due to a lack of investment in new or updated products, historically high prices and extreme cost-cutting measures resulting in mismanagement of the U.S. market, a key cash generator.
The company, which also owns brands such as Dodge, Fiat, Chrysler and Peugeot, lowered its annual guidance target in September, a month before the automaker reported a 27% drop in third-quarter net profit.
Stellantis sales were also sluggish this year. Most recently, the company reported that global vehicle sales fell about 20% year-over-year during the third quarter. This included extending years of freefall in the United States despite Tavares’ attempts to correct what he called “arrogant” mistakes.
The company’s U.S.-traded shares are down about 43% in 2024.
Tavares has made cost-cutting at Stellantis a major priority, including self-reported savings of 8.4 billion euros ($9 billion) from the merger.
Cost-cutting measures included reorganizing the company’s supply chain and operations, reducing its workforce in the United States and increasing operations in low-cost countries such as Brazil and Mexico.
Several current and former Stellantis executives, who spoke on condition of anonymity because of the potential impact, previously described the cuts to CNBC as excessively egregious and troubling in the United States.
Tavares refuted claims that the problems were caused by the company’s massive cost-cutting efforts.
“When you’re not delivering for any reason… it can be tempting to use scapegoats. Cutting budgets is easy. That’s wrong,” Tavares said in July.
Stellantis reduced its workforce by 15.5%, or about 47,500 people, from December 2019 to the end of 2023, according to public data. Further job cuts involving thousands of factory workers in the U.S. and Italy this year have sparked outrage from unions in both countries.
The American Auto Workers union has been calling for Tavares’ dismissal for months as members face layoffs and production cuts. Stellantis’ U.S. dealer network has also spoken out against Tavares amid growing inventory and lack of financial support from the company for vehicle sales.
