Stellantis CEO Carlos Tavares Resigns Amid Sales Struggles and Internal Dissent #

Embattled Leadership

Carlos Tavares, CEO of Stellantis, the company behind brands like Chrysler, Jeep, Fiat, and Peugeot, has resigned following differences with the board and amid sinking sales figures. His departure is linked to a significant decline in sales, a surplus of unsold vehicles, and layoffs at several plants. There have been persistent calls for his ouster from U.S. union representatives and sharp criticism from an advisory council of U.S. dealers.

Impact on Stellantis

The resignation echoes mounting tensions between Tavares and the Stellantis board, which reportedly differed in their visions for the company’s future. Tavares played a pivotal role in the merger of French automaker PSA Group and Fiat-Chrysler, creating Stellantis, the world’s fourth-largest automaker. Although initially slated to retire in 2026, Tavares will leave earlier with the appointment of his successor expected by mid-2025. Until then, an interim committee under John Elkann will lead Stellantis.

Strategic and Economic Challenges

The decision for Tavares’ departure comes amidst high prices for Stellantis vehicles in North America, which have dampened sales and alienated traditional customers. Global sales volumes dropped 10% in the first half of the year and 20% in the third quarter. U.S. sales fell 17% within the same period. By late 2023, the average price of a Stellantis vehicle was $58,000 in the United States, second-highest in the industry.

Layoffs and Labor Disputes

Stellantis laid off approximately 1,200 workers at its truck plant in Michigan due to discontinuing the Ram 1500 Classic pickup. Plans to cut one shift at the Toledo Assembly Complex will indefinitely lay off around 1,100 workers. In response, the union threatens new strikes against Stellantis, claiming breach of contract terms, which Stellantis denies.

Financial and Strategic Concerns

Despite strong profits in 2023, which granted Tavares €36.5 million ($36.8 million) in total compensation, there has been severe backlash. Critics argued he prioritized short-term gains over long-term stability, negatively impacting the U.S. market by driving up vehicle prices and closing plants. Critics claim, “The reckless short-term decision-making to secure record profits in 2023 has had a devastating, yet entirely predictable, consequences in the US market.”

Stellantis has adjusted its 2024 profit forecast downward, yet continues to stand by its projected earnings for the current year.