The reign of Carlos Tavares the star it’s over Definitively hailed as the best manager the auto industry had to offer, the controversial CEO He resigned on SundayTaking responsibility for the rapid and shocking decline of parent company Jeep and Ram.
His place will be taken, for the time being, by John Elkann, chairman of the board and heir to Fiat. in one statement Regarding Tavares’ resignation, Stellantis said he has immediately tasked his billionaire son with leading a newly created interim Executive Committee, with governance and oversight duties, until a successor is found.
“Together we will ensure the continued expansion of the company’s strategy in the long-term interests of Stellantis and all of its stakeholders,” Elkann said, likely referring not only to his employees but also to struggling US vendors.
The automaker said it will now be hired by a special board of directors Definitive replacement for Tavaresadding that the search is already “well underway”. This suggests that the question of whether the CEO jumped or pushed is largely academic, as the trust has already been irreparably damaged, a conclusion supported by the wording of the statement.
“Different views have been expressed in recent weeks, and as a result the board and the CEO have taken today’s decision,” independent CEO Henri de Castries said in the statement.
It’s a complete reversal of fortune for Stellantis, who owned more than a dozen car brands including Fiat, Peugeot and Opel thanks to two transformative merger deals completed in the last decade. It was Tavares the architect of the latterFrance’s PSA Elkann merging with Fiat Chrysler Automobiles in 2019.
The automaker published it earlier this year record the results of the yearonly to plunge into crisis within a few months, culminating in open rebellion by its North American dealers. The blame for the company’s recent troubles was now firmly placed on the former director.
Problems in the US market are largely the reason why Stellantis has fallen two places in the global ranking of vehicle sales, sixth place this year.
Who is John Elkann?
The 48-year-old can only trace his lineage back to his great-grandfather Giovanni Agnelli, who laid the foundations of Italian carmaking when he built Fabbrica Italiana Automobili Torino, or FIAT, in 1899 in the northern city of Turin.
No modern Italian dynasty comes closer to being considered a king than theirs. with this tragedy is a constant companion along with fameHe has invited frequent comparisons with the Kennedy dynasty.
In 1997, the nephew of the charismatic patriarch Gianni Agnelli died of cancer in his early thirties, leaving the family without naming an heir. Shortly thereafter, Gianni’s only son died it turned out to be a suicide.
It came in 2003 Agnelli’s own deathThe younger brother Umberto eventually took over, alone more than a year later.
Elkann, the son of Gianni’s daughter Margherita, took over the family business after previously joining the board of Fiat at the age of just 22. But the family tragedy did not end there.
His younger brother Lapo, an eccentric playboy and fashionistahe almost died of a drug overdose in 2005. long legal battle He directly opposed his mother over the inheritance.
Could Elkann be followed in charge of Stellantis?
Elkann has business chops and experience. Elon Musk may be the CEO of a major automaker, but Elkann has been groomed to take care of Fiat since he was in his thirties.
However, although it is certainly conceivable, it is unlikely.
Like the Porsche behind it Volkswagen or the Quandts who control BMW, Elkann has long rejected the prospect of directly running the day-to-day operations of his family’s automotive empire.
Instead, he has ceded the task to a professional management class while focusing as CEO of Exor, the investment vehicle created to sustain and diversify the family’s wealth through active management of portfolio holdings in sports clubs, newspapers and insurance, among others.
A company spokesman declined to comment luck beyond what was in the company’s press release, just “stay tuned” for more details to come, including the exact composition of the interim Executive Committee.
Tavares was Elkann’s second CEO after Sergio Marchionne, who took advantage of Chrysler’s difficulties after its 2008 bankruptcy. In 2014, the notorious heavy hitter and workaholic acquired full ownership, creating Fiat Chrysler Automobiles. His sudden death four years later complications of shoulder surgery Tavares’ PSA-turned-partner sped up his search.
Why did Tavares have to go?
the star surprised the market after warning in September that it would move ahead with plans to liquidate the bloated US vehicle inventory if necessary. The resulting reduction in the expected profit margin revealed bigger problems than expected.
Sellers at the beginning of the month Tavares exploded arguing that it prioritized short-term success over longer-term problems for a strategy that inflated 2023 results and pocketed nearly $40 million in compensation, more than any other automaker.
This time, however, the company was quick to point out that Tavares wasn’t going to leave an even bigger mess for Elkann to clean up. Stellantis confirmed on Monday that it remained on track to meet its revised guidance for the full year.
That doesn’t appear to be reviving investor confidence: The automaker’s shares fell more than 8% in European trading, and will open significantly lower when the bell rings on the Big Board in New York.
Elkann, however, extended his respect to Tavares for first rescuing the French carmaker behind Peugeot and Citroen after the previous owner’s mismanagement before nursing Opel. General Motors.
“Our thanks to Carlos for his years of service and the role he has played in the creation of Stellantis,” said Elkann.
