Rohit Baniwal, writer
Brief news
- Carlos Tavares has resigned as CEO of Stellantis amid growing disagreements with the board, effective immediately.
- The company is in the process of appointing a new CEO and will establish an interim executive committee led by Chairman John Elkann.
- Stellantis’ stock fell 7% in premarket trading following the announcement, and the company reaffirmed its lowered financial expectations for the year.
Detailed news
DETROIT — In the midst of growing “different views” between the executive and the board of directors, Carlos Tavares, CEO of Stellantis, has unexpectedly resigned from his position at the automaker, according to a statement released by the firm on Sunday.
Tavares’ resignation was approved by the board of directors of the world’s fourth-largest automobile manufacturer on Sunday. It is effective instantly because he is leaving now.
Stellantis, a manufacturer of Jeeps, has stated that the process of appointing a new CEO is “well under way” and that the company anticipates completing the search for a new CEO during the first half of the next year. Before that time comes, the business has announced that it will form a new interim executive committee that will be overseen by Chairman John Elkann.
A flawless alignment between the reference shareholders, the Board of Directors, and the Chief Executive Officer has been the foundation of Stellantis’ success ever since the company was founded. In spite of this, in the past few weeks, a variety of perspectives have surfaced, which has led to the Board of Directors and the Chief Executive Officer arriving at the decision that was made today, as stated by Henri de Castries, the senior independent director of Stellantis, in a press release.
Stellantis refuses to give any other information surrounding the resignation, according to a spokesperson for the company.
Around seven percent of the automaker’s shares that were traded in the United States fell during premarket trading on Monday. Before the departure, the stock had dropped by around 43 percent in the year 2024.
“The market will inevitably ask why the Stellantis board considered that not having a permanent CEO for some months was preferable to keeping the current CEO in place,” Bernstein analyst Daniel Roeska said in an investment note on Sunday night. Roeska was referring to the potential question that the market will ask. When it comes to the stock price, we are having a hard time identifying any scenario in which these occurrences may be interpreted in a good light.
Stellantis reaffirmed its previously decreased expectations for the year on Sunday. The projection comprised an adjusted operating income margin of between 5.5% and 7% and an industrial free cash flow that ranged from minus 5 billion euros ($5.3 billion) to minus 10 billion euros.
A little over two months after the firm made the announcement that Tavares would retire at the conclusion of his contract in early 2026, Tavares has decided to leave from his position. Stellantis claimed at the time that it intended to announce the appointment of a replacement by the fourth quarter of the following year.
Source : CNBC news
