There are few executives in the automotive world who have been as disruptive as Carlos Tavares. The Portuguese was appointed general director of Grupo PSA since its rescue by the French government and had assumed leadership in the new era after the merger with FCA. Although he had a contract until 2026, he has announced his immediately resigns as CEO of Stellantis due to the tense relationship with the board of directors and the poor results achieved so far this year. Until a successor is decided, leadership will be provided by an interim committee headed by Chairman John Elkann.
Tavares, in his most recent stage, was known for cost reduction at any price. It has carried out a notable restructuring plan in which cuts have been the protagonists. Many expenses have been eliminated and the product portfolio of almost all brands has been optimized, so that with few platforms could make many models. It had also been warned that brands that were not profitable could have their days numbered, since getting the accounts settled was the most important thing.
However, the results were not as expected and the fourth largest manufacturer in the world by volume continued to fall. In the first half of 2024, there was a drop of almost 50% in profits, with a stock market fall of 38% in the last twelve months. This situation has caused Tavares to clash with the board and some shareholders, something that has finally ended with the director’s resignation. Something that was blamed on him were short-term solutions and dismal results in North America.
In the United States and other markets on the other side of the pond, high levels of cars in stock and very slow sales are accumulating, with a17% drop in the third quarter of the year. We must not forget that in the Stellantis portfolio there are brands with great history such as Dodge, Ram, Jeep and Chrysler. Although Tavares was one of the most respected and valued managers in the motor world, it seems that the situation has been unsustainable.
He will surely be remembered for his ability to get the manufacturer ahead in times of crisis thanks to that strong management and not exempt from controversy. The layoffs and the reduction of platforms have not been well received, but the numbers have been adding up to date. Now we will have to see what the future of Stellantis is without its star manager. It is in question whether all brands and In Spain there are also unknowns. There was talk of the assignment of new electric models for the Vigo or Figueruelas plants, although we will have to wait to see how this is resolved.
