Stellantis, the parent company of Chrysler, announced that CEO Carlos Tavares would be retiring at the end of his contract in early 2026. The company is facing challenges in its North American operations, with declining earnings and sales. Last week, it cut its profit forecast for 2024 and hinted at possible reductions to dividends and share buybacks. The company’s stock has fallen 42% this year due to missteps in North America, where sales of popular products like Jeep and Ram trucks generate much of its profits.
The confirmation of Tavares’ retirement plans comes after the announcement that Stellantis was searching for his successor. The company now plans to name his replacement by the fourth quarter of 2025. Senior management changes have already been made, with Doug Ostermann taking over as finance chief and Antonio Filosa being appointed as the North America chief operating officer. Carlos Zarlenga, the previous North America COO, has not had his future role announced yet.
Tavares, who has been CEO since the merger of Fiat-Chrysler and PSA in 2021, has faced criticism for the company’s bloated inventories and profit decline. Despite his previous success in making Stellantis profitable, recent struggles have led to concerns among investors and industry observers. The company’s forecast was recently adjusted from positive cash flow to negative cash flow for the year, leading to further doubts about its financial health.
In response to investor concerns, Tavares mentioned that poor-performing brands within the company could be eliminated in order to cut costs. The company has faced criticism from various stakeholders, including labor unions, auto dealers, and shareholders. The management reshuffle and structural changes within Stellantis aim to address these concerns and prepare the company for the future challenges in the automotive industry.
The management changes have not been able to calm investors’ nerves, with analysts expressing skepticism about the company’s ability to recover. Stellantis is also restructuring its supply chain organization by moving it to the manufacturing division to improve performance among suppliers. Tavares emphasized the company’s duty to adapt and prepare for the changing automotive landscape, highlighting the need for ethical responsibility in navigating through these challenges.
