Carlos Tavares, the CEO of DETROITStellantis, abruptly left the company on Sunday due to growing disagreements between the board of directors and the executive.
On Sunday, the fourth-largest automaker in the world announced that Tavares’ resignation had been accepted by its board. His departure takes effect right now.
Stellantis, a Jeep manufacturer, stated that it is well underway with its search for a new CEO and anticipates wrapping it up in the first half of next year. According to the corporation, a new interim executive committee headed by chairman John Elkann would be formed in the interim.
Since its founding, Stellantis’ success has been based on the CEO, the Board, and reference shareholders all being perfectly aligned. Henri de Castries, senior independent director of Stellantis, stated in a release that the Board and the CEO came to today’s decision as a result of divergent opinions that surfaced in recent weeks.
A representative for Stellantis refused to provide any further details on the resignation.
Less than two months after the corporation declared that Tavare will retire at the conclusion of his contract in early 2026, he resigned. Stellantis stated at the time that it will appoint a replacement before the end of the next year.
Since the establishment of Stellantis through the 2021 merger of Fiat Chrysler Automobiles and PSA Groupe, Tavares has served as its leader. Since 2014, he has served as the board chair.
In recent years, the lifelong automotive veteran and former Nissan executive Carlos Ghosn’s protégé has been widely praised for leading the merger and turning Stellantis into one of the most lucrative automakers in the world.
However, due to poor management of the U.S. market, the company’s main source of income, a lack of investment in new or updated items, historically high prices, and drastic cost-cutting measures, its financial results this year have significantly fallen short of expectations.
A month before the manufacturer reported a 27% drop in third-quarter net revenues, the business, which also owns brands like Dodge, Fiat, Chrysler, and Peugeot, cut its annual projection targets in September.
This year, Stellantissales has also had difficulties. The business most recently recorded a roughly 20% drop in global vehicle sales during the third quarter compared to the same period last year. Despite Tavares’s efforts to rectify what he has referred to as arrogant errors, this included prolonging a years-long free fall in the United States.
In 2024, the company’s U.S.-traded shares are down almost 43 percent.
Tavares made decreasing costs a top priority for Stellantis, which included a self-reported reduction of 8.4 billion euros ($9 billion) from the transaction.
In order to cut costs, the corporation has restructured its operations and supply chain, reduced its workforce in the United States, and increased employment in lower-cost nations like Brazil and Mexico.
A number of current and former Stellantis executives earlier told CNBC that the cuts were so harsh that they were excessive and that they were causing issues in the United States. They spoke on condition of anonymity because of the possible consequences.
Tavares denied that the company’s extensive cost-cutting measures had caused issues.
You could want to use someone else as a scapegoat if you fail to produce for any reason. The cut to the budget is simple. Tavares stated in July that it was incorrect.
Public documents show that between December 2019 and the end of 2023, Stellantis cut its workforce by 15.5%, or about 47,500 workers. Thousands of plant workers in the U.S. and Italy have lost their jobs this year, which has angered unions in both nations.
As its members experience production cuts and layoffs, the United Auto Workers union has been demanding Tavares’ departure for a number of months. Due to Tavares’ excessive inventory and lack of funding to sell cars, the Stellantis U.S. dealership network has also voiced its disapproval of the company.
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