The president of Stellantis confirmed this week that the search for a new CEO has begun, as Carlos Tavares' contract expires in 2026.
For several weeks now, the news hasn’t been rosy regarding Stellantis, the automotive giant that owns American brands Ram, Jeep, Chrysler and Dodge.
The company has endured a 48-percent drop in profits and a 16-percent slide in sales in the first half of 2024. It has set a goal to reduce inventories by 100,000 units in the U.S. by the beginning of next year. Things aren't going well.
And when that's the case, the buck stops inevitably at the top; eyes turn to the big boss. Many accuse CEO Carlos Tavares of being responsible for the “disaster” and “rapid deterioration” of the American brands.
As it happens, the current CEO's contract expires in January 2026. And this week, we learned from a pretty reliable source that it may not be renewed.
The search for a replacement for Tavares is on
In an interview with Bloomberg, Stellantis president John Elkann confirmed that the search for a new top executive had begun. He did not rule out renewing Tavares' contract after the current agreement expires, however. Tavares has been at the helm of Stellantis since its creation, when FCA (Fiat Chrysler Automobiles) and PSA (Peugot Société Anonyme) merged in January 2021 to create what is now the world's fourth-largest automaker in terms of car sales. In all, Stellantis has 14 brands.
When he took office, Tavares said that each of those brands had 10 years to show that it deserved to remain within the group. A few months ago, Tavares declared that some brands might be dropped if they show red bottom lines. Rumours of Maserati's demise began to circulate, but those were quickly denied.
Sterling Heights plant called out
Regarding the Ram division, Tavares pointed the finger at the Sterling Heights, Michigan plant, where too many newly built 1500 pickups have to be repaired as soon as they come off the assembly line. Quality issues need to be addressed.
Then there's the anticipated slowdown in growth for electric vehicles in some parts of the world, a reality that forced Stellantis to halt production of the 500e for four weeks.
It’s far too early to conclude that Carlos Tavares' days are numbered, however. Bloomberg reported that sources close to the matter believe the 66-year-old executive will not be replaced. It's not necessarily unusual for a company to launch a search process for a replacement at certain times, and Tavares would even be involved in that process. Let's not forget his age, too; perhaps he'll want to bow out before he's 70.
Stay tuned.