Stellantis CEO Carlos Tavares Resigns Amid Union Criticism

Stellantis has announced the immediate resignation of CEO Carlos Tavares amid ongoing management challenges and rising union criticism. The automaker, which owns brands such as Jeep, Peugeot, and Fiat, confirmed on Sunday that Tavares stepped down following internal disagreements with the Stellantis board. The company is now seeking a successor, with an appointment expected by mid-2025, ahead of its original 2026 timeline.

"Stellantis’ success since its creation has been rooted in a perfect alignment between the reference shareholders, the Board, and the CEO," said Henri de Castries, Senior Independent Director, Stellantis. However, he acknowledged that recent differences of opinion necessitated the leadership change.

The resignation has been met with approval from labor unions, including the United Auto Workers (UAW) and France’s Force Ouvrière, both of which have long criticized Tavares’ management approach. UAW President Shawn Fain described the move as "an important step in the right direction for a company that had been mismanaged and mistreated its workforce." He cited "irresponsible management" that led to layoffs and unsold vehicles accumulating at dealerships.

Tavares became Stellantis CEO in 2021 after the merger of PSA Group and Fiat Chrysler Automobiles (FCA). Renowned for his cost-cutting strategies, he previously revitalized PSA by turning around brands such as Peugeot and Opel. At Stellantis, Tavares focused on consolidating operations, streamlining production, and driving profitability through aggressive cost-saving measures, including layoffs and facility closures.

While these efforts improved profitability initially, they also created significant friction with unions and local governments. In the United States, workforce dissatisfaction grew amid high inventory levels and declining revenues. Stellantis reported a 27% drop in net revenue for the third quarter of 2024, driven by weak sales in key markets like Europe and North America.

Despite these challenges, the Stellantis board expressed gratitude for Tavares’ contributions. Chairman John Elkann stated, "We thank Carlos for his years of dedicated service and the critical role he played in creating Stellantis, as well as in previous turnarounds of PSA and Opel." The company reaffirmed its full-year guidance, despite ongoing difficulties in its core markets.

Tavares’ tenure is marked by bold strategic initiatives, including the development of multi-energy platforms catering to electric vehicles, hybrids, and internal combustion engines. Stellantis also pursued significant investments in EV battery production through a collaboration with China’s CATL. However, these global ambitions have been tempered by regional challenges, particularly in the United States, where the company continues to face issues with market share and public perception.