Stellantis CEO Carlos Tavares Abruptly Resigns Amid Boardroom Dispute
Carlos Tavares, the CEO of Stellantis, has resigned with immediate effect following a boardroom clash, leaving the automotive giant in a state of uncertainty. Stellantis, the parent company of iconic brands such as Vauxhall, Jeep, Fiat, Peugeot, and Chrysler, is grappling with a challenging year, marked by plummeting sales and profit warnings.
A Shock Departure
The announcement of Tavares’ resignation comes shortly after Stellantis revealed plans to shutter its Vauxhall van factory in Luton, threatening 1,100 jobs, and following a profit warning in September. The company’s share price has plummeted by 40% this year, significantly underperforming compared to its rivals.
Henri de Castries, Stellantis’ senior independent director, acknowledged the internal conflicts in a statement:
“In recent weeks, different views have emerged which have resulted in the board and the chief executive coming to today’s decision.”
Legacy of Carlos Tavares
Tavares, renowned for his sharp cost-cutting measures, initially rose to prominence at Renault and later revitalized PSA Group, transforming it from the brink of bankruptcy. His crowning achievement was the merger of PSA Group with Fiat Chrysler in 2021, forming Stellantis. However, recent criticisms of his strategy have cast a shadow over his tenure, with analysts accusing him of excessive cost-cutting at the expense of product innovation and quality.
Prof David Bailey of Birmingham Business School highlighted Stellantis’ struggles in North America, where outdated product lines and rising inventories have led to slipping market share.
“Suppliers, dealers, workers, and investors are deeply unhappy, making Tavares’ position untenable,” Bailey noted.
Immediate Impact on Stellantis
The company announced plans to appoint a new CEO by mid-2024. In the interim, Stellantis’ chairman John Elkann, part of the influential Agnelli family, will lead a newly established executive committee. Elkann’s leadership and his family’s significant stake in Stellantis will be pivotal in determining the company’s future direction.
The Future of UK Operations
Tavares’ departure raises questions about Stellantis’ UK operations, particularly the planned closure of the Luton plant, which had been set to transition to electric van production by 2025. While the company plans to consolidate electric van production at Ellesmere Port, uncertainty looms over the future of its UK facilities.
According to Prof Bailey, “Everything is up in the air… I don’t think there are any guarantees about the future of Stellantis’ operations in the UK.”
Global Challenges for Stellantis
Beyond the UK, Stellantis faces challenges in Europe, including sluggish adoption of electric vehicles and rising competition from Chinese manufacturers. While a recent partnership with China’s Leapmotor offers some promise, it remains in its infancy.
As the board searches for a successor, the automotive industry watches closely to see how Stellantis navigates this critical period. The new leadership will inherit a company at a crossroads, with immense pressure to innovate and stabilize its global operations.
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