The automotive industry was jolted yesterday as Carlos Tavares, chief executive of Stellantis, abruptly resigned following a significant decline in the carmaker’s financial performance. The world’s fourth-largest automotive manufacturer, home to prestigious brands including Peugeot, Fiat, and Jeep, confirmed the departure in a statement on Sunday.
The resignation marks an unexpected turn of events, as Tavares had been expected to remain at the helm until early 2026. Since joining Peugeot owner PSA in 2014, Tavares had been credited with rescuing the company from near insolvency and orchestrating the landmark €50bn merger with Fiat-Chrysler in 2021.
Sources close to the matter revealed growing tensions between Tavares and board members regarding the company’s strategic direction. The disagreements centred on approaches to address declining profits, with Stellantis shares experiencing a troubling 43 per cent drop this year. “There was a sense that Carlos was moving too fast to retrieve his reputation at the risk of creating future problems,” disclosed one insider familiar with board deliberations.
John Elkann, Stellantis’ chair, will lead an interim executive committee until a new chief executive is appointed, expected by the first half of 2025. The company maintains its 2024 financial guidance, targeting an adjusted operating profit margin between 5.5 and 7 per cent.
The departure comes amid challenging times for Stellantis, with the company facing negative free cash flow projections of €5bn to €10bn for 2024. Labour relations have also become strained, with factory workers in Italy and the US threatening industrial action over production cuts.
Despite the leadership upheaval, industry analysts remain cautiously optimistic. Bernstein analyst Daniel Roeska noted Elkann’s “good instincts” in previous executive appointments, though acknowledging the interim period would prove challenging for both management and investors .
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