Stellantis Begins Search For New CEO To Succeed Carlos Tavares (Updated)

Editor’s Note: This story has been updated with a confirmation from Stellantis.

Italian automaker Stellantis NV STLA is looking for a new CEO to replace Carlos Tavares, the company said in a statement on Tuesday.

What Happened: Tavares took the helm of the company in January 2021. The search for a new CEO is part of the normal process of determining leadership succession “given the importance of the position,” a Stellantis media representative told Benzinga in a statement.

Tavares' contract is set to expire in 2026. The company added that there is still a possibility that the current CEO will stay in the role for longer.

Earlier this month, President of U.S. Stellantis National Dealer Council (NDC) Kevin Farrish wrote to company CEO Tavares, accusing him of “short-term decision-making” and urged that the CEO spend more to clear older inventory.

Tavares’ decisions, the NDC President said, ended up shrinking the company’s market share and hurting its many brands. Stellantis, however, said that it takes “absolute exception” to the letter, and termed it a “public personal attack.”

The company has also faced flack from the United Auto Workers (UAW) union. Last week, UAW said that it filed federal unfair labor practice charges at the National Labor Relations Board (NLRB) against Stellantis for alleged violation of the labor contract entered into last year.

The union alleges that Stellantis is attempting to move the production of the Dodge Durano SUV out of the U.S. and is also looking to not reopen the idled Belvidere assembly plant in Illinois despite it being promised.

The company, however, said that it has abided with the agreement it entered into last year with the union and will continue to.

Why It Matters: For the first half of 2024, Stellantis reported a 48% fall in net profit to €5.6 billion ($6.22 billion) and a 14% fall in net revenue to €85 billion, owing to a dip in market share in North America.

"It is an understatement to say that H1 2024 results were disappointing and humbling," Tavares said at the company's earnings call in July.

“The Company’s performance in the first half of 2024 fell short of our expectations, reflecting both a challenging industry context as well as our own operational issues… We have significant work to do, especially in North America, to maximize our long-term potential," he said while also reiterating his personal involvement with the teams in North America to fix the issue.

In the second quarter alone, Stellantis saw its sales in the U.S. fall 21% to 344,993 vehicles.

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