Carlos Tavares, the CEO of Stellantis, has resigned with immediate effect following a significant boardroom clash. Carlos Tavares, who oversaw the automotive giant since its creation in 2021 after the merger of Fiat Chrysler and PSA Group, is stepping down amid a challenging period for the company, which has seen declining sales and profits, particularly in North America. His abrupt departure comes just two months after Stellantis issued a profit warning, and it adds to the turmoil surrounding the company’s future.
Stellantis, which owns brands such as Vauxhall, Jeep, Fiat, Peugeot, and Chrysler, has faced mounting challenges, including a sharp drop in sales and a projected decline in profits. Carlos Tavares, known for his cost-cutting approach and his ability to turn around struggling companies, had previously earned a reputation for being a tough leader. Critics, however, have argued that his aggressive cost-reduction strategies may have hurt product quality and delayed key product launches. His leadership has also been marked by tensions surrounding factory closures, such as the planned closure of the Vauxhall van-making plant in Luton, which will put approximately 1,100 jobs at risk.
In a statement about Carlos Tavares’ departure, Henri de Castries, Stellantis’ senior independent director, acknowledged that the company’s success was initially built on a strong alignment between shareholders, the board, and the CEO. However, he noted that differing views had recently emerged, leading to the decision to part ways. The resignation follows a period of significant pressure on Carlos Tavares, with the company’s performance suffering, particularly in North America, where sales have been weak, and its product lineup outdated.
David Bailey, a business economics professor at Birmingham Business School, emphasized that Stellantis’ current issues, including declining sales, rising inventories, and slipping market share, were driving discontent among stakeholders such as suppliers, dealers, and workers. Bailey suggested these problems had also made Carlos Tavares’ position untenable. Since the start of the year, Stellantis’ share price has fallen by 40%, underperforming its competitors in the automotive industry.
While Stellantis had already begun the search for a new CEO in September, Carlos Tavares was initially expected to remain in the role until at least 2026. Following his resignation, the company announced that it aims to appoint a new chief executive by mid-2025. In the interim, Stellantis will establish an executive committee led by John Elkann, the chairman of the company and a member of the Agnelli family, which has a significant stake in the firm.
Carlos Tavares’ departure also raises questions about the future of Stellantis’ operations in the UK, particularly the closure of the Luton plant. The site, which currently produces petrol and diesel vans, was slated to start making electric vehicles by 2025, but the company’s shift to consolidating electric van production at its Ellesmere Port plant in Cheshire has cast doubt on the long-term viability of the Luton site. Despite hopes that the closure could be reversed, experts remain uncertain about the future of Stellantis’ UK operations.
