Last June, Carlos Tavares admitted to acting with “arrogance” and responding belatedly to the growing production and inventory difficulties plaguing the automotive group in the United States. Four months later, the CEO of Stellantis has confirmed his concerns, as problems seem to be worsening on both sides of the Atlantic.
Could Stellantis’ problems in the United States accelerate the separation with Carlos Tavares?
In the United States, Stellantis‘ market share is declining, and forecasts for the third quarter of 2024 are not at all positive. This situation has been weighed down by declining profits and falling sales, which has led to production cuts and increasing layoffs across the United States, even in pickup and SUV plants such as Warren Truck and Jefferson North in Detroit. The company has indicated in a recent statement that more layoffs are coming, as Stellantis is pushing to eliminate expensive inventory clogging dealer lots after last year’s record profits. This is creating tensions with the UAW union, but also with dealers.
Investors are noticing the change: Stellantis’ market capitalization has fallen to about $43 billion, compared to $86 billion six months ago. Stellantis Chairman John Elkann is reportedly already evaluating candidates for Tavares’ position, in case the company’s board decides to seek a new CEO before the Portuguese executive’s contract expires in 2026. In this situation, it wouldn’t be surprising if executives opted for a change at the top, as recovering from a multi-faceted crisis can prove extremely difficult.
In less than 12 months, the automotive group led by Tavares, merging Fiat Chrysler Automobiles and Groupe PSA, has transformed from being the financially strongest automaker to the least strong, going from the home of Motor City’s most popular brands, with Jeep and Ram, to complaints about incomplete lineups with few planned replacements. For these reasons, some think that all this could accelerate Tavares’ departure from Stellantis, without waiting for the contract to expire in 2026.