Carlos Tavares, a renowned automotive veteran, has stepped down as CEO of Stellantis following mounting criticism of his leadership style and strategic decisions. His resignation, announced on December 1, comes after a tumultuous year marked by strained relations with U.S. employees, plummeting stock performance, and a growing divide between his vision and the realities of the American market.
Tavares, known for orchestrating the successful merger of PSA Groupe and Fiat Chrysler in 2021, had a reputation as a transformative leader. However, his relentless focus on cost-cutting and his “Dare Forward 2030” strategy—aimed at achieving double-digit profit margins—sparked discord among employees, suppliers, and even the board of directors.
Clashes Over Strategy and Market Realities
Critics within Stellantis cited Tavares’ perceived arrogance and unwillingness to adapt to the unique demands of the U.S. market as key reasons for the company’s struggles. His fixation on electric vehicles (EVs) at the expense of gas-powered models alienated executives who argued for a more balanced approach. One former executive remarked, “If you don’t know the market, you don’t know the customers, you can’t make the right decisions.”
Tavares’ cost-cutting measures also drew ire. He simplified vehicles like the Jeep Grand Cherokee while hiking prices beyond market norms, outsourced engineering work to low-cost countries, and controversially ended production of the popular V-8 Hemi engines in favor of greener alternatives.
“Everybody wanted to keep [Hemi],” said a source. “But it was, ‘You need to be greener,’” leaving U.S. leaders feeling powerless to counter the decision.
Employee Discontent and Leadership Disconnect
The cultural divide between Tavares, who lived in Europe, and U.S. employees further exacerbated tensions. His decision to address North American issues during a brief summer visit, while employees coped with overnight meetings to align with European schedules, was emblematic of the disconnect. “The center of the company became France,” a former executive lamented, despite Tavares’ initial claims that the company’s heart lay in the Atlantic.
Employees and suppliers likened the pressure to cut costs to having a “pistol to your head.” Many felt Tavares prioritized short-term gains over long-term growth, leading to strained relationships with unions, dealers, and internal teams.
Stellantis’ U.S.-traded shares plummeted by 43% in 2024, starkly contrasting with General Motors’ 55% gain and Ford’s 9% decline. Investors grew increasingly dissatisfied with Tavares’ leadership, culminating in the board’s decision to negotiate his resignation.
“Transformational leadership requires vision and consensus-building,” noted analysts from Bernstein. For Tavares, a penchant for micromanagement and cost-cutting ultimately proved detrimental.
Interim Leadership and the Path Ahead
In the wake of Tavares’ departure, Stellantis has established an interim executive committee led by Chairman John Elkann. The company plans to appoint a new CEO in the first half of 2025.
While Tavares, 66, had initially been praised for his ability to navigate complex mergers and turnarounds, his leadership at Stellantis underscores the challenges of balancing global ambitions with local realities. The automaker now faces the daunting task of rebuilding trust, reinvigorating its U.S. operations, and charting a path forward in an increasingly competitive market.
For Stellantis, Tavares’ exit marks the end of an era—and the beginning of an uncertain yet pivotal chapter.
