Italian automaker Stellantis NV is on the hunt for a new CEO to take over from Carlos Tavares, whose current contract is set to expire in 2026. While the company claims this is part of their regular leadership succession planning, the news comes at a time when Stellantis is facing significant headwinds.
In recent months, the company has been grappling with criticism from both its dealer network and the United Auto Workers (UAW) union. The National Dealer Council (NDC), representing U.S. Stellantis dealerships, penned a letter to Tavares, accusing him of “short-term decision-making” and urging him to invest more in clearing older inventory. The NDC contends that Tavares’ strategies have led to a shrinking market share and hurt the company’s various brands.
Meanwhile, the UAW has filed unfair labor practice charges against Stellantis, alleging that the company is planning to move production of the Dodge Durango SUV out of the U.S. and is also refusing to reopen the idle Belvidere assembly plant in Illinois, despite a previous commitment. Stellantis, however, maintains its adherence to the labor contract it signed with the union last year.
The challenges facing Stellantis are reflected in its financial performance. The company reported a 48% drop in net profit for the first half of 2024, landing at €5.6 billion ($6.22 billion), along with a 14% decline in net revenue to €85 billion. The primary reason for this downturn is a significant decrease in market share in North America.
In July, Tavares acknowledged the company’s disappointing results and said that they have “significant work to do, especially in North America, to maximize our long-term potential.” This includes addressing the operational issues that have contributed to the company’s difficulties in the region.
Whether Tavares will remain in his role beyond 2026 remains to be seen, but the search for a new CEO signals a period of uncertainty for the automaker as it navigates these challenges and seeks to regain its footing in the global automotive market.
