The 2024 Paris Motor Show
Stellantis shares fell at the opening on Monday the day after the announcement of the sudden resignation of Carlos Tavares, general director of the group since its creation, following differences with the main shareholders and the board of directors of the car manufacturer born from the merger between PSA and FCA.
At 08:01 GMT, the stock lost 5.5%, compared to a decline of 1.2% for the CAC 40.
According to a source close to the matter, the directors of Stellantis unanimously approved the early departure of the general director, whose mandate ran until the beginning of 2026.
“The company's Board of Directors, meeting (Sunday) under the chairmanship of John Elkann, accepted the resignation of Carlos Tavares as CEO of Stellantis with immediate effect,” the group said in a press release published Sunday evening, adding that he expected to find a new general director by next summer.
Until now one of the most respected leaders in the automobile industry, architect of the recovery of PSA and Opel, of the creation of Stellantis and accustomed to double-digit financial performances, Carlos Tavares found himself this year target of strong criticism for a sharp deterioration in the manufacturer's operational performance in the United States.
This contributed to a spectacular warning on the group's annual financial objectives in the fall, which led to a vast reshuffle at the head of the group, including the departure of the financial director and the head of North American activities, while sparing the general manager.
Carlos Tavares, however, subsequently indicated that he would not seek a new mandate after the end of his current mandate, at the beginning of 2026, and that he would then retire.
“The success of Stellantis since its creation has been based on perfect alignment between the key shareholders, the board of directors and the CEO. However, in recent weeks, different points of view have emerged, which has led the board to administration and the CEO to today's decision”, explained Henri de Castries, senior independent director of Stellantis, quoted in the press release.
The succession process on “good track”
The group, which notably said it expected a cash hemorrhage of up to ten billion euros in 2024, confirmed on Sunday evening the annual objectives presented on October 31. He did not give details on the differences of opinion even though Carlos Tavares had initiated a recovery plan for North American activities last summer.
“The process of appointing the new permanent CEO, managed by a special committee of the board of directors, is on track and will be completed during the first half of 2025,” Stellantis added in its press release. “In the meantime, a new temporary executive committee, chaired by John Elkann, will be established.”
This process was initially expected to conclude in the fourth quarter of next year.
John Elkann is also CEO of Exor, the holding company of the Agnelli family, founder of Fiat, main shareholder of Stellantis, followed by the holding company of the Peugeot family, founder of PSA, and the French State via BPIfrance.
In the statement, the Stellantis president thanked Carlos Tavares for “his years of dedicated service and the role he played in the creation of Stellantis, complementing the turnarounds of PSA and Opel, putting us on the path to to become a global leader in our industry.”
“We knew that Carlos Tavares was in the hot seat (…) but we now need to find a more serene social climate (and) to restore strong stability in the teams, to ensure generational renewal and to stop the skills drain”, reacted Benoît Vernier, CFDT representative at Stellantis.
The group, whose stock has lost around 40% of its value since the start of the year, committed last week to production volumes for all its French sites until 2027. “These announcements must be maintained”, added Benoît Vernier after the announcement of the departure of Carlos Tavares.
For Philippe Diogo, representative of the Force Ouvrière union at Stellantis in France, “the sudden announcement of the resignation of Carlos Tavares from his position as CEO of Stellantis, combined with the establishment of a temporary executive committee without strong leadership, exposes dangerously leading the group to a major crisis.”
“In a period marked by profound turbulence in the global automobile industry, this hasty decision weakens the entire company and its thousands of employees,” he added.
Quick to describe the challenges facing the automobile industry as a “Darwinian period”, a straight-talker, Carlos Tavares saw his relations become strained with the unions in the United States as well as with the Italian government, anxious to see Italian automobile production is reduced.
(Written by Corentin Chappron and Gilles Guillaume, edited by Kate Entringer)
