In the end the ax fell sooner than expected. But could it be otherwise? The CEO of Stellantis (Fiat, Jeep, Chrysler, Peugeot, Opel), the Portuguese Carlos Tavares, who has been sitting in an ejection seat for several months, was forced to resign this Sunday from the board of directors with “immediate effect”. And the group’s first shareholder, John Elkann, a member of the powerful Agnelli family who founded Fiat, seems to have activated the button given that the manager was fired “due to a difference of opinion” according to Henri de Castries, administrator of Stellantis. In a laconic press release the group announced that it had “accepted the resignation of Carlos Tavares”.
A year before the official end of his term, the emblematic leader, who has long enjoyed enormous popularity and spends his time traveling to diffrent factories around the world, must leave his post. But we knew his days were numbered at the helm of the Franco-Italian-American group since the board of directors officially began looking for his successor in October through “an identification process” led by Elkann himself.
The auto sector in the midst of the crisis
Carlos Tavares, a performance-obsessed central engineer, pays for the poor results of a sprawling group that includes no fewer than fifteen brands. Last July, the published data and in particular an 18% drop in sales in North America, until then the most profitable market, sounded ominous.
Tavares still thought he was the master of watches when he acknowledged in july that Stellantis was going through a “very turbulent transition period” and that he expected to recover in the second half. But the third quarter results did not encourage optimism among shareholders, with a 20% decline.
But the resignation of this leader, until then untouchable, comes at a time when the automotive sector has fallen into “full Darwinian crisis”, in the words of Tavares himself. The competition from electric cars is shaking up a sector where European and above all German excellence (Volkswagen and BMW) reigned supreme. Tesla in the US and a host of Chinese manufacturers have reshuffled the cards. Historic manufacturers approached the transition to electric very late and are struggling to make up for it.
The controversy over his salary
For Tavares, even before the recent industrial difficulties, the situation had begun to change last April.His astronomical salary of 36.5 million euros for the year 2023 had sparked heated controversy and the ire of internal unions. It represented 518 times the group’s average salary.
Two years earlier the big boss, often described as the “soldier monk” of the automotive industry, had grossed 19 million euros. Salary that the President of the Republic himself, Emmanuel Macron, had defined as “shocking”. Last spring, the controversies did not prevent shareholders from validating 70% of his salary, largely linked to the objectives achieved.
In the face of public outrage, Carlos Tavares stood his ground. «90% of my salary comes from the company’s results, so this shows that the company’s results are apparently not that bad», he justified, underlining the «contractual dimension» of his compensation, as for «a footballer or a Formula 1 player driver”. Before launching: “if you think this is not acceptable, make a law and change the law and I will respect it”.
When questioned in October about the reshuffles within the Stellantis board that had reduced his prerogatives, Tavares took these major maneuvers with a distance. “In 2026, the person who answers you will be 68, a reasonable age to retire. It is not true? “. And he added: “If you ask my wife, it is indeed a requirement on her part. I am a good husband! » The latter will therefore see her husband return to his home a little earlier than expected.
How will the leadership transition at Stellantis impact its electric vehicle strategy?
Interview: The Future of Stellantis – Insights from Automotive Expert Dr. Maria Santos
Time.news Editor: Welcome,Dr. Santos. Thank you for joining us today. the recent resignation of carlos Tavares from Stellantis has sent shockwaves through the automotive industry. What are your initial thoughts on this unexpected turn of events?
Dr. Maria Santos: Thank you for having me. It is indeed indeed a significant shock, especially considering Tavares’ tenure as CEO. His resignation signals a pivotal moment for Stellantis at a time when the automotive sector is undergoing massive transformation. It raises questions about the company’s strategic direction, especially as they navigate electric vehicle growth and changing market dynamics.
Time.news Editor: Tavares was quite popular and seemed too be a driving force behind Stellantis.Why do you think his departure was necessary according to the board, particularly with the mention of “difference of opinion”?
Dr. Maria Santos: Tavares had a distinct vision for Stellantis, which may have been at odds with the Agnelli family’s long-term strategies for the company.The automotive industry is facing numerous challenges, from regulatory changes to supply chain issues. if the board felt that Tavares’ vision could hinder the company’s adaptability to these challenges, it could have led to the decision for his resignation. Divergence in strategic priorities is frequently enough a catalyst for such significant leadership changes.
Time.news Editor: The agnelli family and John Elkann have considerable influence over Stellantis’ direction. What do you foresee as the immediate next steps for the company under new leadership, particularly during this transition period?
Dr. Maria Santos: The board’s swift initiation of a search for a successor suggests they are keen on a seamless transition. I expect Stellantis will prioritize stability while also seeking an innovative leader who can enhance their competitive edge. The new CEO will likely need to focus on integrating their diverse brands, ramping up EV production, and addressing market shifts with agility. It’s also a time to reassess partnerships and explore new technological collaborations.
Time.news editor: How do you think this leadership change will impact Stellantis’ operations globally, especially with Tavares’ hands-on approach to visiting factories?
Dr. Maria Santos: Tavares was known for his active engagement with the workforce, which fostered a strong company culture. The new leader will need to strike a balance between maintaining that connection and implementing any new strategies. Global operations may see shifts in focus as the next CEO might prioritize certain markets or brands based on evolving consumer demands. A clear dialog strategy will be crucial during this transition to maintain employee morale and productivity.
Time.news Editor: Given the growing focus on sustainability and the electric vehicle market, how critical is it for Stellantis’ new CEO to emphasize these areas?
Dr. Maria Santos: Absolutely critical. The automotive landscape is changing rapidly with consumer preferences pivoting towards sustainability. The new CEO must not only focus on ramping up EV production but also on the broader aspects of sustainability,such as sourcing materials responsibly and reducing the carbon footprint of manufacturing processes.This approach will be essential for Stellantis to maintain a competitive edge and meet regulatory requirements.
Time.news Editor: what’s your outlook for Stellantis in the next year? Do you think they can emerge stronger from this leadership change?
Dr. Maria santos: While uncertainty always accompanies leadership transitions, stellantis has a solid brand portfolio and a talented workforce. If they select the right leader who can articulate a clear vision and rally the team around sustainability and innovation, I believe they can not only stabilize but also position themselves strongly in the evolving automotive market. This is a pivotal moment, and I’m optimistic about their potential for growth and transformation.
Time.news Editor: Thank you, Dr. Santos, for sharing your insights. It will be engaging to see how Stellantis navigates this significant change in leadership.
Dr. Maria Santos: Thank you for having me. It was a pleasure discussing this vital topic with you!