Stellantis CEO Resigns... Worsening Management Difficulties in the Auto Industry

Appointment of New CEO for the First Half of 2025

Carlos Tavares, CEO of Stellantis, a multinational automaker, has resigned. This is a dismissal-related personnel change due to a sharp decline in profits and decreased sales in the United States. The automotive industry's management difficulties are worsening due to China's economic downturn and the slowdown in electric vehicle market growth.

On the 1st (local time), Stellantis announced in a statement that a new CEO will be appointed in the first half of 2025. Until the new CEO is appointed, an interim board led by Stellantis Chairman John Elkann will manage the company.

Stellantis explained that Tavares is leaving the company earlier than his original term because the CEO, the board, and shareholders had differing views on the company's future. His term was originally set to last until early 2026. Earlier, Bloomberg reported in October that Stellantis had begun searching for a new CEO, but Tavares had stated he would remain in his position until the end of his term.

Stellantis's leadership change, including the dismissal of CEO Tavares, was due to a rapid business slowdown caused by management strategy failures. The company maintained high prices against the industry's overall trend of price reductions, resulting in decreased sales in the first half of this year and a 50% plunge in net profit. Sales in the third quarter of this year also fell 20% compared to the same period last year. Consequently, Stellantis's stock price has dropped more than 40% since the beginning of this year.

Global automakers, including American companies, are facing a challenging business environment due to China's economic downturn, decreased demand for electric vehicles in Europe, and tariff threats from U.S. President-elect Donald Trump. Last month, Ford announced it would cut 4,000 jobs in Europe by the end of 2027. Volkswagen is also demanding a 10% wage cut from workers to reduce costs and improve profitability. Additionally, it is planning to close at least three factories in Germany and lay off thousands of workers.