DETROIT (Reuters) – Chrysler’s parent company Stellantis (STLA, STLAM.MI) confirmed on Thursday that Chief Executive Officer Carlos Tavares will step down when his contract expires in early 2026, delaying North America. As the company struggles to rebuild its business, it has announced significant changes in senior management. .
The French-Italian automaker’s traditionally profit-making powerhouse has seen its profits and sales decline, with the company last week cutting its 2024 profit forecast and potentially reducing next year’s dividend and share buybacks. suggested.
Analysts have downgraded the company’s stock, and its Milan-listed shares have fallen 42% this year. Stellantis has been making mistakes in North America, where much of its profits typically come from selling popular products like Jeeps and Ram trucks.
The company’s U.S.-listed shares fell about 1% in premarket trading on Friday.
Confirmation of Tavares’ plans to retire comes weeks after Stellantis announced it was searching for a replacement, although the company said at the time that he could remain after his contract expires. The world’s fourth-largest carmaker by revenue now says it plans to name a successor by the fourth quarter of 2025.
Stellantis has named former China chief operating officer Doug Osterman as finance director, replacing Natalie Knight, who is retiring.
The company also named Antonio Filosa, in addition to his role as Jeep brand CEO, chief operating officer for its North American division, replacing Carlos Zarenga, whose future role has not been announced.
Stellantis CEO Carlos Tavares is pictured in Turin, Italy. (Reuters)
Tavares, an avid race car driver, has previously been widely known for building Stellantis into one of the world’s most profitable automakers, but in 2021 he will be joining Fiat Chrysler and Peugeot manufacturer PSA. He has led the company since its establishment through a merger with the company, and he was a director of the company. Served as chair since 2014.
But after years of the company’s huge profit margins that were the envy of competitors in Detroit and beyond, the company’s ballooning inventory and plummeting profits in recent months have shocked industry observers.
“After ignoring investor concerns about U.S. inventories and discounts for much of the past 12 months, the company lost a significant amount of confidence when it lowered its guidance in late September,” Bernstein analysts said in a note. ” he said.
“Today’s management changes further extend the list of senior management changes (21 in the past 12 months) and are unlikely to calm investor nerves,” they added.
Last week, Stellantis cut its cash flow forecast for this year to between 5 billion and 10 billion euros ($5.5 billion and $10.9 billion) from positive to negative.
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Mr Tavares had previously maintained that all 14 of the group’s brands, including Maserati, Fiat, Peugeot and Jeep, were assets in the Stellantis portfolio, but in July he announced that the underperforming brands had been cut due to cost-cutting measures. He said he could be fired.
He said Stellantis is battling stiff competition from Chinese electric car makers that are gaining market share in Europe, but to beat those rivals Stellantis must “strive to be more Chinese.” There is a need,” he said.
Stellantis aims to significantly increase sales of electric models, aiming to have 100% of its passenger vehicle sales in Europe electrified by 2030 and 50% of its passenger cars and light trucks in the United States to be electric. There is. after that. The company plans to offer 75 electric models worldwide within that period.
shareholder concerns
Mr. Tavares faces harsh criticism from the United Auto Workers union, dealers and shareholders as the automaker seeks to refine its strategy and improve its financial position.
He said in a statement Thursday that a broader leadership shakeup was aimed at addressing those concerns.
“In this Darwinian era for the automotive industry, our duty and ethical responsibility is to adapt and prepare for the future,” he added.
In addition to the leadership changes, Stellantis is restructuring its structure by transferring its supply chain organization to manufacturing to further focus on improving supplier performance.
Reached for comment, a UAW representative sent a list of criticisms of Tavares by labor groups, as well as a link to the union’s website with a photo of Tavares thrown in a trash can.
Unions are laying the groundwork for a nationwide strike against the carmaker, claiming it has not kept its promises in last year’s contract signed after a six-week strike that cost it around 750 million euros in profits.
(Reporting by Nora Eckert in Detroit; Additional reporting by Shivansh Tiwary in Bengaluru and David Shepherdson in Washington; Editing by Jamie Freed)
