Stellantis CEO Carlos Tavares abruptly quits as US Jeep, Ram sales falter

MILAN/DETROIT - Stellantis chief executive Carlos Tavares resigned abruptly on Dec 1, two months after a profit warning at the maker of Jeep, Fiat and Peugeot cars that has lost around 40 per cent of its value in 2024.

The company said it would seek to find a replacement CEO in the first half of 2025.

Senior independent director Henri de Castries said in a statement the decision for Mr Tavares to leave resulted from different views emerging in recent weeks among major shareholders, the board and Mr Tavares.

Previously regarded as one of the most respected executives in the auto industry, Mr Tavares came under criticism after Stellantis issued a profit warning on its 2024 results.

That included a forecast for a cash burn of up to €10 billion (S$14.16 billion), mostly due to slow sales and bloating inventories in its North American market, the group’s profit powerhouse.

The warning triggered a wide reshuffle of the group’s top management – including changes of its chief financial officer and of its head of North American operations – that initially spared Mr Tavares.

After that, however, Stellantis said Mr Tavares was not seeking a new CEO term and would retire at the end of his current mandate, in early 2026.

Stellantis shares have lost around 40 per cent of their value in 2024, while shares of US rival Ford Motor are down 7 per cent in 2024 and General Motors (GM) up 55 per cent.

“The company’s board of directors, under the chairmanship of John Elkann, accepted Carlos Tavares’ resignation today from his role as chief executive officer with immediate effect,” Stellantis said in a statement.

Mr Elkann – the scion of the Agnelli family, which founded Fiat, and the top Stellantis shareholder through its investment company Exor – thanked Mr Tavares for his role in the creation of Stellantis, the world’s fourth-largest carmaker by sales.

Other big shareholders include the Peugeot family and the French government, through public investment bank BPI France.

Stellantis said the process to appoint the new permanent CEO was well under way and would accelerate to conclude within the first half of 2025.

In the meantime, a new interim executive committee, chaired by Mr Elkann, would be established.

The process to select a new CEO was initially set to be completed by the final quarter of 2025.

‘It couldn’t get worse’

Mr Jeff Laethem, who owns a Stellantis dealership in Detroit, said he was relieved at the news of Mr Tavares’ resignation.

The last year has been punishing for him, as inventory has built up and sales of once-dependable vehicles dropped.

“It couldn’t get worse,” Mr Laethem said, adding that his nearby GM dealership has not faced the same challenges.

Stellantis dealers have become more vocal with their displeasure in the last few months, sending a letter outlining their concerns to Mr Tavares in September.

Sales of the automaker’s vehicles through the third quarter of 2024 were down 17 per cent in the US compared with the year-ago period, with significant losses across the Dodge, Ram, Jeep and Chrysler brands.

The automaker has been struggling to sell even 2023 model-year cars, data provided to Reuters by car shopping app CoPilot shows.

There are 112 days of supply on dealer lots of Ram 1500 pick-up trucks and Jeep Wagoneers, CoPilot data shows, about 20 days higher than their respective rivals, the Chevrolet Silverado and Ford Expedition.

‘New ideas and fresh forces’

Mr Fabio Caldato, a portfolio manager at AcomeA, which holds Stellantis shares, said he expected Mr Tavares would not finish his term.

“There is too much pressure on Stellantis’ management, and new ideas and fresh forces are needed to plan the company’s future,” he said, adding that he would not be surprised if the automaker appoints an American CEO to turn around the company’s slumping shares.

Mr Tavares has led Stellantis since its creation in early 2021 through the merger of Fiat Chrysler and Peugeot owner PSA.

The company has 14 brands, and Mr Tavares warned underperformers among the portfolio were at risk of being axed.

His outspoken style has often seen him in conflict with counterparts, including US unions and the Italian government, which complained about his decisions to reduce car production in Italy.

In America, the United Auto Workers (UAW) union threatened a nationwide walkout, alleging Stellantis failed to keep the commitments it made in a contract finalised in 2023. Stellantis said it has complied with the labour agreement.

“Tavares is leaving behind a mess of painful layoffs and overpriced vehicles sitting on dealership lots. We look forward to new Stellantis leadership that respects hard-working UAW members and is ready to keep its promise to America by investing in the people who build its products,” UAW president Shawn Fain said in a statement. REUTERS