Crisis at Stellantis with CEO Carlos Tavares, Resigning

Stellantis, the multinational automaker behind brands like Chrysler, Jeep, Fiat, and Peugeot, has confirmed the resignation of its CEO, Carlos Tavares, citing unresolved differences with the board and ongoing struggles in sales performance.

The company’s announcement follows a cascade of challenges, including declining sales, unsold inventory piling up at dealerships, and significant layoffs across multiple plants. Criticism of Tavares’ leadership came from key stakeholders, including the United Auto Workers (UAW) union, representing Stellantis’ U.S. workforce, and a council of its U.S. dealers.

According to Henri de Castries, Stellantis’ Senior Independent Director, Tavares and the board had diverging views on the company’s direction, which ultimately led to his departure. The 66-year-old Portuguese executive, instrumental in merging PSA Group and Fiat-Chrysler to create Stellantis, had been expected to retire in 2026. His exit, however, has accelerated the timeline for leadership transition.

Stellantis has already initiated the search for a permanent CEO, with a Special Committee overseeing the process. John Elkann will temporarily lead the newly formed Interim Executive Committee until a successor is appointed, a decision anticipated by mid-2025.

The resignation comes amid mounting concerns over Stellantis’ pricing strategy, which has alienated many of its core customers. Industry analysts note that the rising costs of Jeep, Ram, Dodge, and Chrysler vehicles have contributed significantly to declining sales in North America. By late 2023, the average price of a Stellantis vehicle in the U.S. had soared to $58,000, although it has since dipped slightly to $55,000—still among the highest in the industry.

Plummeting sales figures further illustrate the crisis. Global sales fell 10% in the first half of the year, followed by a staggering 20% drop in the third quarter. U.S. sales alone have declined 17% in the first nine months. These figures have prompted drastic measures, including the layoff of 1,200 workers at the Warren, Michigan truck plant and the indefinite elimination of a shift at the Toledo Assembly Complex South plant, affecting another 1,100 employees.

The UAW has expressed dissatisfaction with Stellantis’ labor practices, accusing the company of violating contractual agreements and threatening to launch a new strike. Stellantis denies these allegations and has pledged to challenge any strike’s legality.

Tavares’ lucrative pay package, totaling €36.5 million in 2023, has also drawn criticism. Both the UAW and the Stellantis U.S. Dealers’ Council have pointed to executive compensation as a symbol of misplaced priorities. In a letter earlier this year, council chairman Kevin Farrish blamed Tavares for prioritizing record profits and executive rewards at the expense of competitive pricing and long-term market stability.

Farrish highlighted the consequences of these decisions, from factory closures to diminishing market share. The UAW echoed these sentiments, describing Tavares’ resignation as a positive step toward rectifying the company’s troubled course.

As Stellantis grapples with these challenges, the coming months will be critical in determining its future direction under new leadership.

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