Paris, Dec 2, 2024: Carlos Tavares, the CEO of Stellantis, has stepped down with immediate effect, marking a significant shift in leadership for the global automotive giant. The company, formed through the 2021 merger of PSA Group and Fiat Chrysler, cited “differences in vision” between Tavares and the board regarding strategies to address the group’s financial challenges.
The announcement comes as Stellantis grapples with a profit slump, intense competition from Chinese automakers, and the challenging transition to electric vehicles (EVs).
Leadership Transition Amid Uncertainty
In a statement, Stellantis confirmed Tavares’ resignation and appointed an interim executive committee led by chairman John Elkann to oversee operations until a permanent CEO is chosen. The board aims to finalize the appointment by mid-2025.
Independent director Henri de Castries noted, “Recent weeks revealed divergent perspectives that culminated in today’s decision.” However, no further details about the disagreements were disclosed.
Stellantis Under Pressure
The company’s financial performance has deteriorated significantly in recent months. In its July earnings report, Stellantis disclosed an 18% drop in North American sales during the first half of 2024, followed by a 20% decline in the third quarter compared to 2023. This led the company to revise its profit margin forecast to a modest range of 5.5% to 7.0%, a sharp drop from its earlier double-digit ambitions.
Tavares, a known cost-cutter, had built his reputation by turning around struggling automakers like PSA and Opel. At Stellantis, his early successes included strong profits and a swift push into EVs and hybrids. However, recent challenges—delayed model launches due to technical issues and weakening global demand—have overshadowed these achievements.
Global Production Cuts Spark Concerns
Stellantis has faced backlash over factory closures and job losses, particularly in Europe. Recent decisions include:
- Closure of the Luton, England factory, affecting 1,100 workers.
- Production cuts in Italy, sparking protests by thousands of Fiat employees in October.
- A shift toward lower-cost production facilities in countries like Turkey, Morocco, and Brazil.
While production in France has also been reduced, Stellantis has assured the government that no factories will be shuttered in the country.
The Road Ahead for Stellantis
Stellantis’ struggles reflect broader industry challenges, including:
- Intense price competition from Chinese EV manufacturers.
- Stabilizing global car prices after the semiconductor shortage-driven boom.
- Balancing profitability with sustainability goals during the transition to EVs.
Despite these hurdles, Stellantis remains optimistic about its U.S. market recovery. Elkann, dismissing speculation about a potential merger, reiterated the company’s focus on navigating current challenges independently.
A Cost-Cutter’s Legacy
Carlos Tavares leaves behind a mixed legacy. While his tenure began with notable achievements—like record profits and investments in EV technologies—recent financial setbacks and strategic disagreements have marred his final years. His controversial 2023 salary of €36.5 million ($38.6 million) also drew criticism amid declining profit margins and workforce reductions.
As Stellantis searches for a new leader, the auto giant faces a critical juncture in redefining its strategies to remain competitive in a rapidly evolving global market.
Sidenote: This news report is curated with insights from multiple reliable news sources.
