Stellantis CEO resigns abruptly amid boardroom dispute
Carlos Tavares, the CEO of Stellantis, one of the world’s largest car manufacturers, has resigned with immediate effect following a boardroom clash. The abrupt departure of Tavares, known for his reputation as a cost-cutting strategist, comes during a tumultuous period for the company, which owns iconic brands like Vauxhall, Jeep, Fiat, Peugeot, and Chrysler.
Tavares’ exit follows a challenging few months for Stellantis, marked by a profit warning in September and a recent announcement to shut down its Vauxhall van manufacturing plant in Luton, threatening 1,100 jobs. The move has raised questions about the company’s direction and its operations in the UK.
Before his resignation, Tavares was regarded as a pivotal figure in the global automotive industry. Having previously turned around the struggling French carmaker PSA and later leading its merger with Fiat Chrysler in 2021, Tavares was celebrated for his ability to transform struggling companies. However, critics argued that his aggressive cost-cutting measures sometimes hurt product quality and delayed innovation.
Stellantis issued a statement addressing Tavares’ departure, emphasizing that the company’s success since its creation was rooted in alignment between shareholders, the board, and the CEO. However, in recent weeks, divergent views emerged, leading to the decision for Tavares to step down. The announcement comes at a time when Stellantis faces declining sales, falling profits, and growing dissatisfaction among its stakeholders.
The company has struggled particularly in North America, where it has seen a sharp drop in sales, an outdated product lineup, and rising inventories. These issues have led to a significant loss in market share and discontent among suppliers, dealers, and investors. David Bailey, a business economics professor at Birmingham Business School, described the situation in North America as the root cause of Stellantis’ recent troubles, making Tavares’ position “untenable.”
Stellantis’ share price has plummeted by 40% this year, significantly underperforming compared to its competitors. In September, the company acknowledged it was searching for a successor to Tavares but initially planned for him to remain CEO until at least 2026. Following his sudden resignation, Stellantis announced it would establish an interim executive committee led by Chair John Elkann while aiming to appoint a permanent CEO by mid-2024.
Carlos Tavares’ leadership frequently highlighted concerns about the future of Vauxhall’s UK operations, citing Brexit-related challenges and the shift toward electric vehicle production. His sudden departure adds uncertainty to the planned closure of the Luton plant, which currently manufactures petrol and diesel vans. The site was set to transition to producing electric vans in 2025, but Stellantis has since announced plans to consolidate electric van manufacturing at its Ellesmere Port facility in Cheshire. Tavares’ exit raises questions about the stability of these plans and the broader future of Stellantis’ operations in the UK.
Stellantis’ UK operations face significant uncertainty, with no assurances about their long-term future. While some decisions could potentially be reversed, the departure of CEO Carlos Tavares adds complexity to the company’s challenges. Amid declining performance and shifting market demands, Stellantis must navigate a difficult path forward, leaving the future of its UK plants and broader strategy in question.