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MILAN — Targets deemed unrealistic or destructive by some board members triggered the sudden fall of Stellantis CEO Carlos Tavares just a month after he received their full backing, two people with knowledge of the matter told Reuters.
Unhappy with his aggressive targets for sales and cost cuts, and his contentious dealings with the automaker’s suppliers, dealers and unions, the board unanimously wanted Tavares to go, the sources said.
“Something broke in November,” one of the sources said.
Tavares resigned on Dec. 1, leading to a selloff of shares in the automaker, which owns brands including Jeep, Ram, Fiat, and Peugeot.
Details of the clashes leading to his ouster have not been previously reported. Tavares did not respond to requests for comment.
Stellantis finance chief Doug Ostermann said divergences between Tavares and Stellantis board members included priorities for the 15 months left before Tavares’ term was set to expire.
“Those related to tactical issues on how to run the business over that short-term time period, and what actions should be taken in regard to short-term metrics versus longer-term benefit of the company,” he said.
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Disagreements also emerged on relations Stellantis was having with dealers, suppliers, unions and governments, Ostermann said. “Clearly we need to build back trust,” he said.
Ostermann was was speaking at a Goldman Sachs virtual conference on Dec. 4 in the first public remarks by a Stellantis top executive since Tavares resigned.
Ostermann, who previously headed Stellantis’ operations in China, is now seen as a potential candidate to succeed Tavares as CEO. An American national, he has served in different positions in Stellantis and formerly at Fiat Chrysler, where he joined in 2016 as group treasurer.
He has played a key role in striking Stellantis’ current partnership with Chinese automaker Leapmotor.
Ostermann said Stellantis is confident that an expected improvement in performance could allow the automaker to pay a dividend in 2025. He said the automaker, which in September issued a shock profit warning on its 2024 results, had the ability to generate cash and perform well in 2025.
Tavares blaming U.S. execs annoyed board members
Tavares, who earlier this year was paid €36.5 million ($38.3 million at current exchange rate) in compensation based on Stellantis’ 2023 results, had annoyed some board members in October, at the Paris auto show, by publicly blaming the automaker’s U.S. management for falling sales and rising inventories in that market, one of the sources said. But the board continued to back him.
In November, however, Tavares’ brash style led to a “totally untenable” relationship with the board, whose members represent major shareholders Exor, the Peugeot family and the French government, the other source said.
When board members started asking more specific questions about the executive’s strategies, the person said, “Tavares’ reaction was: ‘You do not interfere with my job — that is not your business.’”
Board members, irritated, continued pressing Tavares, the source said. They were unsettled by what they viewed as the CEO’s relentless but narrow focus on cost-cutting, which had caused supply disruptions and angered dealers. Those problems had been overlooked in previous years, when Stellantis was hitting double-digit profit margins.
Now those and other issues were causing angst across the sprawling company, as Tavares tangled with dealers, unions, suppliers and governments — and now board members.
“You cannot make enemies with everybody,” the person said.
The clashes led the board to oust Tavares with no one to replace him. It was a stunning reversal from its plan for a smooth succession when he retired in 2026 as scheduled.
Chairman John Elkann had declared on Oct. 10 that the board was “unanimous in its support of Carlos Tavares” even as the company jettisoned its CFO Natalie Knight and its North American chief Carlos Zarlenga the same day.
Stellantis has daunting to-do list
Stellantis is now searching for a new CEO with a daunting to-do list: stabilize a global company with 14 brands, bloated U.S. inventories and falling U.S. and European market share — all while facing surging Chinese EV rivals, tough new European emissions standards and disruptive electric vehicle and trade policies championed by U.S. President-elect Donald Trump.
Stellantis’s profit warning at the end of September undermined Tavares’ reputation as an industry leader in maximizing profit margins and payouts for investors. Dealers, industry experts, and customers say the company has priced itself out of the market in both the U.S. and Europe.
Stellantis shares are down 43 percent so far this year.
Tavares was well known throughout his tenure at both PSA and then Stellantis — formed in 2021 when PSA merged with Fiat Chrysler — for his top-down leadership style, leaving no one in doubt as to who was in charge.
But in November, board members felt compelled to confront Tavares, one of the sources said. “Something had to be done,” the person said.
Tavares had ‘irrational’ view on EV quotas
One source said the first sign of tensions between Tavares and the board came over in recent weeks on how to handle European Union rules that will levy hefty fines unless electric vehicles account for at least 21 percent of Stellantis’ 2025 sales — a big jump from the automaker’s 12 percent EV share so far this year.
Tavares refused to back an auto industry lobbying push now underway to renegotiate the rules, saying instead that Stellantis would simply work to avoid fines.
The board feared the company would have to “massively decrease” combustion-engine car sales to hit the regulatory target, one of the sources said.
Company staffers were “totally lost” over the “irrationality” of the view that Stellantis could achieve such a large EV share increase without fines, the person said, which prompted the board to question Tavares.
Both sources used the term “radical” to describe Tavares’ sales targets.
Tavares also outlined other controversial plans at board meetings in November, saying he wanted to drastically cut costs in Europe that had already been “cut to the bone,” one source said.
Tavares, the source said, also proposed a cash-management policy focused on 2024 at the expense of 2025 cash flow. This might have exposed Stellantis to a new profit warning in the future, the second source said.
Board members also bristled at Tavares’ often-contentious dealings with key players across what one source described as the “ecosystem” surrounding Stellantis, including tensions with “suppliers, dealers, consumers,” the governments of Italy and France, and U.S. labor unions.
Tavares, the source said, sometimes viewed suppliers as expendable in his cost-cutting drive, while board members worried that replacing trusted parts makers was not quick and caused disruptions.
“You cannot just say ‘you’re out’” to longtime suppliers, the source said. “That puts at risk your very capacity to produce cars.”
MILAN — Targets deemed unrealistic or destructive by some board members triggered the sudden fall of Stellantis CEO Carlos Tavares just a month after he received their full backing, two people with knowledge of the matter told Reuters.
Unhappy with his aggressive targets for sales and cost cuts, and his contentious dealings with the automaker’s suppliers, dealers and unions, the board unanimously wanted Tavares to go, the sources said.
“Something broke in November,” one of the sources said.
Tavares resigned on Dec. 1, leading to a selloff of shares in the automaker, which owns brands including Jeep, Ram, Fiat, and Peugeot.
Details of the clashes leading to his ouster have not been previously reported. Tavares did not respond to requests for comment.
Stellantis finance chief Doug Ostermann said divergences between Tavares and Stellantis board members included priorities for the 15 months left before Tavares’ term was set to expire.
“Those related to tactical issues on how to run the business over that short-term time period, and what actions should be taken in regard to short-term metrics versus longer-term benefit of the company,” he said.
Publishing Partner Sponsored Content from Kerrigan Advisors
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Sponsored Content from Kerrigan Advisors
TitleKerrigan Advisors Represents Sunrise Auto Group in Sale of Memphis Dealership to Jim Keras Automotive
Sunrise Buick GMC is sold to Jim Keras Automotive, representing Kerrigan Advisors 81st franchise in the Southern region sold since 2023.
Image
Multimedia Content
Disagreements also emerged on relations Stellantis was having with dealers, suppliers, unions and governments, Ostermann said. “Clearly we need to build back trust,” he said.
Ostermann was was speaking at a Goldman Sachs virtual conference on Dec. 4 in the first public remarks by a Stellantis top executive since Tavares resigned.
Ostermann, who previously headed Stellantis’ operations in China, is now seen as a potential candidate to succeed Tavares as CEO. An American national, he has served in different positions in Stellantis and formerly at Fiat Chrysler, where he joined in 2016 as group treasurer.
He has played a key role in striking Stellantis’ current partnership with Chinese automaker Leapmotor.
Ostermann said Stellantis is confident that an expected improvement in performance could allow the automaker to pay a dividend in 2025. He said the automaker, which in September issued a shock profit warning on its 2024 results, had the ability to generate cash and perform well in 2025.
Tavares blaming U.S. execs annoyed board members
Tavares, who earlier this year was paid €36.5 million ($38.3 million at current exchange rate) in compensation based on Stellantis’ 2023 results, had annoyed some board members in October, at the Paris auto show, by publicly blaming the automaker’s U.S. management for falling sales and rising inventories in that market, one of the sources said. But the board continued to back him.
In November, however, Tavares’ brash style led to a “totally untenable” relationship with the board, whose members represent major shareholders Exor, the Peugeot family and the French government, the other source said.
When board members started asking more specific questions about the executive’s strategies, the person said, “Tavares’ reaction was: ‘You do not interfere with my job — that is not your business.’”
Board members, irritated, continued pressing Tavares, the source said. They were unsettled by what they viewed as the CEO’s relentless but narrow focus on cost-cutting, which had caused supply disruptions and angered dealers. Those problems had been overlooked in previous years, when Stellantis was hitting double-digit profit margins.
Now those and other issues were causing angst across the sprawling company, as Tavares tangled with dealers, unions, suppliers and governments — and now board members.
“You cannot make enemies with everybody,” the person said.
The clashes led the board to oust Tavares with no one to replace him. It was a stunning reversal from its plan for a smooth succession when he retired in 2026 as scheduled.
Chairman John Elkann had declared on Oct. 10 that the board was “unanimous in its support of Carlos Tavares” even as the company jettisoned its CFO Natalie Knight and its North American chief Carlos Zarlenga the same day.
Stellantis has daunting to-do list
Stellantis is now searching for a new CEO with a daunting to-do list: stabilize a global company with 14 brands, bloated U.S. inventories and falling U.S. and European market share — all while facing surging Chinese EV rivals, tough new European emissions standards and disruptive electric vehicle and trade policies championed by U.S. President-elect Donald Trump.
Stellantis’s profit warning at the end of September undermined Tavares’ reputation as an industry leader in maximizing profit margins and payouts for investors. Dealers, industry experts, and customers say the company has priced itself out of the market in both the U.S. and Europe.
Stellantis shares are down 43 percent so far this year.
Tavares was well known throughout his tenure at both PSA and then Stellantis — formed in 2021 when PSA merged with Fiat Chrysler — for his top-down leadership style, leaving no one in doubt as to who was in charge.
But in November, board members felt compelled to confront Tavares, one of the sources said. “Something had to be done,” the person said.
Tavares had ‘irrational’ view on EV quotas
One source said the first sign of tensions between Tavares and the board came over in recent weeks on how to handle European Union rules that will levy hefty fines unless electric vehicles account for at least 21 percent of Stellantis’ 2025 sales — a big jump from the automaker’s 12 percent EV share so far this year.
Tavares refused to back an auto industry lobbying push now underway to renegotiate the rules, saying instead that Stellantis would simply work to avoid fines.
The board feared the company would have to “massively decrease” combustion-engine car sales to hit the regulatory target, one of the sources said.
Company staffers were “totally lost” over the “irrationality” of the view that Stellantis could achieve such a large EV share increase without fines, the person said, which prompted the board to question Tavares.
Both sources used the term “radical” to describe Tavares’ sales targets.
Tavares also outlined other controversial plans at board meetings in November, saying he wanted to drastically cut costs in Europe that had already been “cut to the bone,” one source said.
Tavares, the source said, also proposed a cash-management policy focused on 2024 at the expense of 2025 cash flow. This might have exposed Stellantis to a new profit warning in the future, the second source said.
Board members also bristled at Tavares’ often-contentious dealings with key players across what one source described as the “ecosystem” surrounding Stellantis, including tensions with “suppliers, dealers, consumers,” the governments of Italy and France, and U.S. labor unions.
Tavares, the source said, sometimes viewed suppliers as expendable in his cost-cutting drive, while board members worried that replacing trusted parts makers was not quick and caused disruptions.
“You cannot just say ‘you’re out’” to longtime suppliers, the source said. “That puts at risk your very capacity to produce cars.”
Articolo di Reuters sulle dimensioni di Carlo Tavares.
Secondo l’agenzia di stampa britannica, Tavares avrebbe criticato in maniera aperta il management della divisione nordamericana addossando tutte le colpe a loro. Ultimamente i rapporti sarebbero stati estremamente tesi con il manager portoghese che avrebbe detto ai membri del consiglio di sorveglianza di non immischiarsi nel suo lavoro.
Allora la sua cacciata non sarebbe una grossa sorpresa. A fare infuriare gli azionisti sarebbe stata anche la posizione di Tavares che era l’unico che si fosse espresso al mantenimento delle multe per i limiti della CO2 nel 2025 in Europa. Si era detto pronto a ridurre in maniera pesante la produzione di veicoli con motore a combustione per favorire elettriche (che perdono una marea di soldi).
La stessa Stellantis non è ben combinata, sarebbe potuta passare da una percentuale del 12% nel 2024 al 21% nel 2025.
È vero che modelli elettrici di volume sarebbero arrivati sul mercato, però comunque era una sfida impossibile.
Tavares stava lavorando anche a mega tagli in Europa, forse gli impianti italiani l’hanno scampata bella.
Ultima modifica di daimlerchrysler il dom dic 22, 2024 8:46 pm, modificato 1 volta in totale.
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