Stellantis CEO Carlos Tavares to retire in 2026 as automaker struggles in North America By Reuters

Written by Nora Eckert

DETROIT (Reuters) – Chrysler Stellantis (NYSE:) parent company confirmed on Thursday that CEO Carlos Tavares will retire at the end of his contract in early 2026 and announced major changes at top management as it struggles to turn around its lagging North American operations. .

Earnings and sales fell at the French-Italian automaker’s traditional dividend, forcing it to cut its 2024 earnings forecast last week and signal possible cuts to its dividend and share buybacks next year.

Analysts downgraded the company’s shares, which have fallen 42% this year after missteps in North America, where sales of popular products such as Jeep and Ram trucks typically generate much of its profits.

Confirmation of Tavares’ plans to retire comes weeks after Stellantis announced he was searching for his successor, although he said at the time it was possible he would stay on after his contract expired. The world’s fourth-largest automaker by sales said it now plans to name his successor by the fourth quarter of 2025.

Stellantis has appointed Doug Osterman, former chief operating officer of its China division, as its chief financial officer, replacing Natalie Knight, who is leaving the company.

The automaker also appointed Antonio Velosa as president of North American operations in addition to his role as CEO of the Jeep brand, succeeding Carlos Zarlenga, whose future role has not been announced.

Tavares, an avid race car driver who was widely touted in previous years for making Stellantis one of the world’s most profitable automakers, has led the company since its inception through the 2021 merger between Fiat-Chrysler and Peugeot (OTC:) PSA Where he has been Chairman of the Board of Directors since 2014.

But the company’s swelling inventories and declining profits in recent months have shocked industry observers after years of its fat margins being the envy of competitors in Detroit and abroad.

“After dismissing investor concerns about U.S. inventories and discounts for much of the past 12 months, the company lost significant confidence when it lowered guidance in late September,” Bernstein analysts said in a note.

“Today’s management reshuffle adds to a growing list of senior management changes (21 in the past 12 months) and is likely unable to calm investor nerves,” they added.

Stellantis last week cut its forecast from positive cash flow to negative cash flow by between 5 billion and 10 billion euros ($5.5 billion-$10.9 billion) this year.

Tavares had previously confirmed that the group’s 14 brands, including Maserati, Fiat, Peugeot and Jeep, were all assets in the Stellantis portfolio, but said in July that underperformers could be axed to cut costs.

It is racing against massive competition from Chinese electric vehicle makers that are gaining market share in Europe, and he said that in order to overcome those rivals, Stellantis must “try to be Chinese ourselves.”

Stellantis is seeking a sharp increase in sales of its electric models, and aims for 100% of its passenger car sales in Europe to be electric by 2030, and for 50% of its passenger cars and light trucks in the US to be electric vehicles by 2030. Then. The company plans to introduce 75 electric models globally in this time frame.

As the automaker tries to hone its strategy and improve its financial position, Tavares has faced intense criticism from the United Auto Workers union, dealers and shareholders.

He said in a statement on Thursday that the wide-ranging administrative change was intended to address these concerns.

“During this Darwinian period for the automotive industry, it is our duty and moral responsibility to adapt and prepare ourselves for the future,” he added.

In addition to the management changes, Stellantis is also changing its structure by moving the supply chain organization to the manufacturing division in an effort to provide more attention to performance improvement among its suppliers.

When asked for comment, a UAW representative sent a link to the union’s website that depicted Tavares in a trash can, at the top of the labor group’s list of criticisms of him.

The union is laying the groundwork for a nationwide strike against the carmaker, alleging it has failed to fulfill commitments made in last year’s contract signed after a six-week strike that cost it profits worth around 750 million euros.

($1 = 0.9146 euros)