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Stellantis (STLA-0.23%) stock sank on Monday after CEO Carlos Tavares abruptly handed in his resignation as issues pile up at the automaker.
On Sunday, Stellantis said it had accepted Tavares’ immediate resignation less than two months after he had confirmed his retirement in 2026, and the search for a successor had begun. The timeline to appoint a new CEO has been moved up to the first half of 2025, at least six months ahead of the earlier schedule.
Although it’s unclear what exactly prompted Tavares’ resignation, a statement from the company hinted at a schism between Stellantis’ CEO and board of directors.
“Stellantis’ success since its creation has been rooted in a perfect alignment between the reference shareholders, the Board and the CEO,” Henri de Castries, Stellantis’ senior independent director, said in a statement. “However, in recent weeks different views have emerged which have resulted in the Board and the CEO coming to today’s decision.”
Stellantis stock sank by more than 7% in pre-market trading Monday. Through Friday, the stock had fallen by more than 42% so far this year.
Tavares’ leadership has been criticized by the United Auto Workers (UAW) union — which represents 43,000 Stellantis workers — and the U.S. Stellantis National Dealer Council, which warned “disaster has arrived” at the company thanks to its approach to the business.
Stellantis confirmed its full-year guidance, which had previously been lowered, as it tackles high dealer inventory and weak sales stemming from what Tavares has called “arrogant” mistakes. Poor performances in Europe and North America, Stellantis’ biggest markets, led it to a 27% decline in net revenue for the July to September quarter.
The UAW has entered a legal battle with Stellantis, filing a series of federal labor charges and alleging that the automaker has failed to keep the promises it made in its 2023 contract. At least two UAW locals have authorized a strike. Stellantis denied the union’s claims and filed several lawsuits against the organization and its locals.
“The UAW welcomes the resignation of Stellantis CEO Carlos Tavares, a major step in the right direction for a company that has been mismanaged and a workforce that has been mistreated for too long,” UAW President Shawn Fain said in a statement. “We are pleased to see the company responding to pressure and correcting course.”
As part of a plan to improve Stellantis’ standing, Tavares and the board enacted a major management shakeup that gave it a new chief financial officer, head of European operations, and CEO of Jeep, Maserati, and Alfa Romeo. Besides those brands, Stellantis owns another 11, including Chrysler, Ram, Citroën, Dodge, and Opel.
“Our thanks go to Carlos for his years of dedicated service and the role he has played in the creation of Stellantis, in addition to the previous turnarounds of PSA and Opel, setting us on the path to becoming a global leader in our industry,” Stellantis chairman John Elkann, who is leading the hunt for Tavares’ successor, said in a statement.
Tavares has led Stellantis since it was formed in 2021 through the merger between the PSA Groupe and Fiat Chrysler Automobiles. He joined the PSA Groupe in 2014 as CEO and board chairman after previously working for Nissan (NSANY+6.68%) and Renault (RNLSY+1.20%).