Stellantis Initiates Search for New CEO and Unveils Strategy to Enhance US Operations, According to Reuters

By Nora Eckert and Giulio Piovaccari

DETROIT/MILAN – Stellantis is on the lookout for a successor to CEO Carlos Tavares, the company announced on Monday. This move comes as the Chrysler parent outlined a strategy to enhance its North American operations by reducing excess inventories and lowering vehicle prices.

Stellantis noted that initiating a search for Tavares’ replacement is standard practice ahead of his contract expiration in January 2026, while the possibility remains that Tavares may continue in his role beyond that date.

Tavares has led Stellantis since its formation in early 2021, turning it into one of the most successful automotive groups in the industry. However, he has been under increasing pressure to address the company’s underperforming North American operations, which have seen a decline in sales and profits, leading to a significant drop in the company’s share price.

A source close to Stellantis Chair John Elkann, the largest shareholder through the Agnelli family holding company, indicated that the decision to search for a new CEO was not prompted by recent events but rather was a recognition that the process of finding a suitable replacement would be lengthy and complex.

Earlier reports indicated that Stellantis was officially beginning its search for Tavares’ successor.

The automaker aims to decrease its U.S. vehicle inventory by 100,000 units by the start of next year, having already made a reduction of approximately 40,000 units in July and August, according to Chief Financial Officer Natalie Knight, who spoke at a recent virtual conference.

“We are navigating challenging times, where there may be prominent winners and losers, and key to being a winner is often being the last company standing,” said Knight. She emphasized that maintaining discipline regarding pricing and inventory would be central to the company’s strategy as it transitions to electric vehicles.

Stellantis is facing mounting pressure from shareholders, dealers, and its unionized workforce to reverse declining sales, profits, and a falling stock price. It is also preparing for a potential strike from the United Auto Workers union, as local Stellantis chapters have begun mobilizing for a nationwide walkout.

“When times are tough, you experience friction everywhere,” Knight said, expressing her hope that investors would view 2024 as a pivotal transitional year rather than a new norm for the Franco-Italian group.

Stellantis reported that its total inventory was approximately 1.4 million vehicles at the end of the first half of the year, during which its adjusted operating profit fell by 40%, primarily due to weak performance in North America.

Recently, Tavares visited the U.S. with the objective of devising a plan to revitalize the struggling operations. He has led a rigorous cost-cutting initiative, which has resulted in workforce reductions. Knight mentioned that the leadership will continue to restructure the business in the coming years.

The company plans to source 80% of its supply from low-cost countries by 2028, a strategy that Knight noted would significantly lower overall expenses.

In addition, Stellantis has reduced prices for several models, including the Jeep Grand Cherokee and Jeep Compass, according to Knight.

While Knight admitted that the first half of the year has been challenging for the automaker, she anticipates improving conditions through the end of 2024. She highlighted that new model sales are expected to make up 15-20% of revenues in the latter half of this year.