Stellantis CEO Tavares Plans Major Management Shakeup

Carlos Tavares, CEO of Stellantis, is preparing to implement significant changes within the automaker’s leadership structure in response to mounting challenges in North America and globally. According to a report by Bloomberg News, Tavares aims to address declining sales and profits that have put pressure on the company’s financial outlook and share price. These issues have been especially pronounced in the United States, where Stellantis has struggled with weakening demand, an inventory surplus, and a misaligned product strategy.

A key issue for Stellantis in the U.S. market has been an overproduction of high-end vehicles, including its Jeep® and Ram models, which have historically been profitable but are now facing reduced demand. At the same time, the automaker lacks enough affordable vehicle options for price-sensitive American consumers, an area where rivals are gaining traction. Adding to this, high interest rates have made financing new vehicles more expensive, further hampering sales. Stellantis’ cost-cutting measures, including frequent job cuts at its U.S. plants, have impacted operational efficiency and put a sour taste in consumers’ mouths, negatively affecting sales and brand perception.

Tavares has remained focused on an aggressive electric vehicle (EV) strategy for the U.S., even though many American consumers are still hesitant to fully embrace EVs. With the majority of Americans not yet ready to make the switch, Stellantis’ EV push could be seen as misaligned with market preferences, particularly as other automakers pivot to more flexible approaches, such as hybrid models, to meet consumer demand. Despite this, Stellantis has recently made moves to introduce Chinese-made EVs to the European market through a joint venture with Leapmotor, where it holds a 51% stake, and has used Chinese-produced vehicles in Mexico under the Dodge and Ram names to broaden its global reach.

Last week, Stellantis revised its 2024 profit forecast, warning of a higher-than-expected cash burn. The company has pledged to cut production and offer significant discounts to revive U.S. sales. Tavares is expected to present a detailed management reshuffle at a board meeting in the U.S. later this week. The proposal is likely to impact various high-level roles, including finance teams, regional heads, and brand executives, as Stellantis seeks to stabilize its position in a rapidly changing market.

Beyond the proposed management changes, the board will also discuss Tavares’ future with the company. Although his contract is set to expire in 2026, there has been speculation about whether it will be extended or if Stellantis will seek new leadership. Extending Tavares’ contract would be particularly interesting given the tensions between U.S. and Italian unions and the shifting market landscape. Other automakers are adapting their strategies to include more hybrid vehicles, while Tavares has firmly committed to an EV-centric approach.

Given Stellantis’ struggles in both North America and Europe, particularly in the Italian market, Tavares faces growing pressure to navigate these challenges swiftly. The company, formed by the merger of Fiat Chrysler Automobiles (FCA) and PSA Group, must now balance consumer demands, economic headwinds, and union concerns while maintaining competitiveness in a volatile global market.