Carlos Tavares leaves the general management of the 4th largest manufacturer in the world, pushed towards the exit after ten years in the group. From PSA to Stellantis, a look back at a decade of the automobile industry.
Carlos Tavares leaves Stellantis. Pushed towards the exit, the boss of the Franco-Italian-American automobile manufacturer announced his resignation with “immediate effect”, one year before the end of his mandate. The abrupt end of a decade at PSA which became Stellantis following the merger with Fiat Chrysler.
Doze of economy: Stellantis without Carlos Tavares – 02/12
Leaving the Renault group, unable to climb the internal ladder further, Carlos Tavares was quickly recruited by the PSA group to succeed Philippe Varin in 2014. He then took the reins of a manufacturer in very poor shape.
Victim of the financial crisis, which disrupted the European market for new cars, PSA has just been narrowly saved from bankruptcy by the arrival of the French state and the Chinese manufacturer Dongfeng.
Cost reduction
When it officially became number 1 in PSA, the group including Peugeot and Citroën posted a loss of more than 2 billion euros. Carlos Tavares does not deviate from his reputation as a “cost-killer” and cuts costs to restore the French company's margins. All industrial operations are scrutinized to rationalize and eliminate waste, even if it means eliminating unprofitable models or assembly lines in certain factories. The workforce went from just over 111,000 people in 2013 to just under 96,000 people in 2015.
Its recovery plan called “Back in the race” also contributes to transforming the DS models into an independent brand, like Peugeot and Citroën. From 2015, the PSA group became profitable again.
After the savings cure, the new strategic plan “Push to pass” (“Push to pass”, a new reference to motorsport) succeeds it in 2016. This time, it is about moving up a gear by leading an offensive international strategy, including a return to the United States, and by launching new vehicles.
In 2017, the PSA group bought the European subsidiary of GM, adding the Opel and Vauxhall brands to its portfolio. With the acquisition of Opel, PSA rises to the position of second European manufacturer, behind Volkswagen.
Carlos Tavares then contributed to the founding of the Stellantis group in 2021, a project initiated two years previously, resulting from the marriage between PSA and FCA. This mega-merger between the two groups gives birth to the fourth largest automobile manufacturer in the world with around fifteen brands in its portfolio, including Peugeot, Citroën, Fiat, Alfa Romeo, Chrysler, Jeep, Lancia and even Opel. The new Italian-French-American group, which placed Carlos Tavares as general manager, then set quarterly records in the early days of its existence.
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Union criticism
But, on the other side of the coin, Carlos Tavares' methods have been regularly denounced by the unions. To produce more and more cheaply, employees and suppliers alike are put under pressure by management. Employees are regularly encouraged to leave, depending on job cuts plans. At the same time, the Franco-Italian-American group is increasingly relying on low-cost countries, such as Brazil, Morocco and Turkey, to manufacture its cars – which has led to difficult relations with the Italian government led by Giorgia Meloni. .
The shortage of microchips, which limited car production, helped Stellantis sell its vehicles at high prices. But the wheels end up seizing up. The group saw its results plummet in the first half of 2024, penalized by sharply declining volumes and losses in market share. Net profit fell 48% over the first six months of the year. The situation did not improve in the following months, weighed down by more serious difficulties than expected in North America, Stellantis' most important region.
At the same time, the rapid electrification of the automotive sector complicates Stellantis' prospects in this already gloomy market. The group also has to manage the issue of Takata airbags, which are forcing it into a vast recall campaign. Not to mention the problems with PureTech engines. An accumulation of difficulties which will have led to the sudden departure of Carlos Tavares this December 1st.
Jérémy Bruno with AFP Journalist BFMTV
