In a surprising turn of events, Carlos Tavares, the CEO of Stellantis, has resigned from his position amidst escalating disagreements with the company’s board of directors. Announced on Sunday, the board accepted Tavares’ resignation, which took immediate effect. This development raises questions about the internal dynamics of Stellantis, the automotive giant born from the 2021 merger of Fiat Chrysler Automobiles and PSA Groupe. The company has already initiated a search for a new CEO, with expectations of completing the appointment by mid-2024. In the interim, John Elkann, the board chairman, will guide a newly formed executive committee through this transitional phase.
Tavares’ departure signals a significant shift in leadership, attributed to “different views” that have recently emerged between him and the board. Henri de Castries, Stellantis’ senior independent director, emphasized that the company’s success had largely relied on the synergy between its shareholders, board, and executive leadership. However, the increasing misalignment in perspectives ultimately led to this drastic decision. The absence of further details from Stellantis officials leaves room for speculation about the underlying issues that prompted Tavares’ exit, especially considering that he had only announced plans for retirement in early 2026 less than two months prior.
Tavares, a seasoned automotive executive with deep industry ties, played a pivotal role in shaping Stellantis from its inception. Under his stewardship, the company positioned itself as one of the most profitable automakers globally. Nonetheless, the firm has faced growing challenges in recent months, particularly in the U.S. market, its crucial revenue source. The company’s financial trajectory has faltered, reflecting poorly on Tavares’ leadership. Factors contributing to this downturn include insufficient investments in new product lines and an over-reliance on severe cost-cutting measures to boost profitability, which raised concerns among both employees and stakeholders.
Stellantis’ stock performance in 2024 has been dismal, with a reported drop of about 43%. Tavares had enacted extensive cost-cutting strategies, reportedly achieving reductions totaling approximately €8.4 billion ($9 billion) following the merger. These measures included reshaping operational structures, streamlining the supply chain, and relocating certain functions to lower-cost regions. However, many of these tactics have faced backlash from employees and industry insiders, who characterize the cuts as excessive and detrimental to U.S. operations. Multiple executives at Stellantis have voiced their frustrations, describing the cost-cutting environment as unsustainable and damaging to the company’s core functions.
Moreover, Tavares’ tenure has not been without conflict with labor unions and dealer networks. The United Auto Workers union had increasingly criticized Stellantis, demanding Tavares’ removal due to ongoing layoffs and drastic production cuts that affected member jobs. Similarly, the U.S. dealership network expressed discontent, citing high inventory levels and inadequate support from the automaker. These tensions have painted a troubling picture of a company in disarray, raising further questions regarding its operational strategy moving forward.
As Stellantis embarks on this new chapter following Tavares’ resignation, the implications for the company’s identity, strategic direction, and employee morale remain uncertain. The board’s commitment to finding a suitable successor is crucial for reinstating confidence among stakeholders and re-establishing a clear vision for the company’s future. Furthermore, the new leadership must carefully navigate the existing challenges within the U.S. market while addressing grievances raised by employees and dealers alike.
The abrupt exit of Carlos Tavares illustrates the precarious nature of leadership in the evolving automobile industry, where market performance, internal alignment, and stakeholder relationships are intricately intertwined. As Stellantis seeks to redefine its trajectory, the automotive world will be watching closely.