DETROIT — Stellantis CEO Carlos Tavares has unexpectedly resigned from the automaker amid increasingly “different views” between the executive and the board of directors, the company said Sunday.
Stellantis, the world’s fourth-largest carmaker, said that its board accepted Tavares’ resignation on Sunday. His departure is effective immediately.
Jeep-maker Stellantis said that its process to appoint a new CEO is “well under way” and that it expects to conclude the search during the first half of next year. Until then, the company said it will establish a new interim executive committee led by Chairman John Elkann.
According to the company, different views emerged between Tavares and the board of directors in recent weeks, leading to the decision for Tavares to step down. Stellantis spokesman declined to disclose any additional information regarding the resignation.
Tavares had led Stellantis since its creation through a 2021 merger between Fiat Chrysler Automobiles and PSA Groupe. However, the company’s financial results have severely underperformed expectations amid mismanagement of the US market, a lack of investment in new or updated products, historically high prices, and extreme cost-cutting measures.
The company’s stock was down approximately 43% in 2024 before the resignation, and shares fell approximately 7% during premarket trading Monday.
Bernstein analyst Daniel Roeska said in an investor note that the market will inevitably ask why the Stellantis board considered not having a permanent CEO for some months preferable to keeping the current CEO in situ. Stellantis confirmed its previously lowered guidance for the year, including an adjusted operating income margin of 5.5% and industrial free cash flow between minus 5 billion euros to minus 10 billion euros.
The UAW President Shawn Fain welcomed Tavares’ resignation, calling it a “major step in the right direction for a company.” The UAW union has been calling for Tavares’ removal due to his mismanagement of the company.