Carlos Tavares has resigned as CEO of Stellantis, one of the world’s largest automakers, following months of tension with the board and significant management challenges.

Stellantis, which owns brands such as Jeep, Fiat, Peugeot and Maserati, announced Tavares’ resignation on Sunday, effective immediately.

Tavares played a key role in the 2021 merger of PSA Group and Fiat Chrysler to form Stellantis. He previously expected to remain CEO until 2026. An interim executive committee led by Elkann will manage the company while a global search for a new CEO takes place.

market reaction

Following the announcement, Stellantis shares fell more than 7% in early European trading on Monday, reflecting management uncertainty and investor concerns about the automaker’s strategic direction. The decline compounds a difficult year for Stellantis, which is already on track to see its stock drop 40% in 2024.

The stock is currently trading at 11.75 euros, down 6.5% over the past five days.

Former Nissan and Aston Martin CEO Andy Palmer praised Tavares as “probably the most professional automotive guy I’ve ever worked with” and credited him with helping create Stellantis. The company emphasized its role and contribution to iconic automobile design.

But UAW Chairman Sean Fein said Tavares’ tenure has been detrimental to workers, saying, “Mr. It was criticized for being.

have trouble changing gears

Stellantis Chairman John Elkann said “differences of opinion” between Tavares and the board led to his resignation after a tumultuous year. Stellantis issued a profit warning in September, citing weak sales and excess inventory in North America. U.S. sales in the third quarter were down 17% from a year earlier, with brands such as Jeep, Dodge and Chrysler all underperforming.

Tensions reportedly flared over Tavares’ focus on short-term profitability at the expense of long-term strategy. Meanwhile, unions in the United States and Italy criticized his management style, citing layoffs and unfulfilled promises. In Italy, Tavares faced political backlash over relocating production.

The closure of the Vauxhall van factory in the UK affected more than 1,000 employees and further deteriorated relations with stakeholders.

Stellantis’ €50 billion electrification investment also came under intense scrutiny. Although Tavares supported ambitious goals for BEV sales in Europe, the company’s EV market share has declined by nearly 2% year-over-year. Analysts blame intense competition from Chinese EV makers and weak demand in Europe for the decline.

Stellantis currently faces the dual challenge of stabilizing its leadership and addressing operational shortcomings. The board has emphasized the need for “new ideas and fresh energy” to survive the transition to electric vehicles and regain market share.