Topline
Shares of Stellantis—the automaker that owns key brands including Jeep, Ram and Chrysler—tanked sharply on Monday morning, hours after the company announced it had accepted CEO Carlos Tavares’ abrupt resignation.
Stellantis CEO Carlos Tavares announced his resignation on Sunday.
Key Facts
The Italian-American automaker’s Paris-listed shares were down more than 7.5% to around $12.1 (€11.5) after markets opened in Europe, while its New York Stock Exchange-listed shares were down 8% in pre-market trading.
Late Sunday, the company announced that CEO Carlos Tavares is stepping down “with immediate effect,” and the company’s board had accepted his resignation.
After the CEO’s exit, the group said it would establish a new interim executive committee led by its Chairman John Elkann.
The company also said it plans to hire a new permanent CEO sometime in the first half of 2025.
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Crucial Quote
In the announcement, senior Stellantis director Henri de Castries indicated that Tavares’ sudden departure might be the result of differences between him and the board. “Stellantis’ success since its creation has been rooted in a perfect alignment between the reference shareholders, the Board and the CEO. However, in recent weeks different views have emerged which have resulted in the Board and the CEO coming to today’s decision,” de Castries said.
Tangent
The United Auto Workers union welcomed the news of Tavares’ resignation, telling CNN that it is “a major step in the right direction for a company that has been mismanaged and a workforce that has been mistreated for too long…We are pleased to see the company responding to pressure and correcting course.” In September, the UAW accused Stellantis of failing to meet the guarantees it had made to workers last year as part of an agreement to end a strike by the union.
Big Number
45.8%. That is how much the value of Stellantis’ shares have fallen since the start of 2024.
Key Background
Tavares has served as Stellantis’ CEO since 2021 when the multinational automaking giant was formed after a merger between Fiat Crysler and France’s PSA Group. Stellantis under Tavares saw initial success as it reported record profits of nearly $20 billion last year. However, a sales slump this year has raised questions about Tavares’ effort to boost the automaker’s profit margins in the U.S. by raising the prices of its mass-market models in the U.S. The company raised concerns about flagging sales earlier this year, blaming competition from Chinese carmakers. In October, the company reported a 27% decline in third-quarter net revenues compared to the previous year.
