Investing.com — Shares of Stellantis (EPA:) dropped by 8% on Monday after the unexpected resignation of CEO Carlos Tavares.
Tavares, who had been at the helm of the automotive giant since its formation in 2021, stepped down with immediate effect, the company said in a statement on Sunday.
The decision was confirmed by the Stellantis Board of Directors, chaired by John Elkann, who said that the process to appoint a permanent replacement is already underway.
However, the automaker does not expect to finalize its decision until the first half of 2025. In the interim, an Executive Committee led by Elkann will oversee the company’s operations.
As per Bernstein, the absence of Carlos Tavares or any other board member during the hastily scheduled post-warning call, restricted to sell-side analysts, was suboptimal. Additionally, the decision to remove CFO Natalie Knight on October 10th, who had been in the role for just 15 months and was not considered the primary cause of Stellantis’ North American challenges, was deemed as ineffective in addressing the underlying issues.
Despite the leadership shake-up, Stellantis reaffirmed its financial guidance for 2024, which was previously presented on October 31.
The company stated that it remains committed to achieving its outlined goals, signaling confidence in its broader strategy.
The departure of Tavares marks a pivotal moment for the multinational automaker, formed through the merger of Fiat (BIT:) Chrysler Automobiles and PSA Group.
Tavares was widely credited for steering the integration and delivering strong operational results.
The company did not disclose the reasons behind Tavares’ resignation, and the situation is likely to remain under scrutiny as Stellantis navigates this critical leadership transition.
“We consider Stellantis as potentially the most attractive 2025 OEM turnaround case, with above-average execution risk,” said analysts at UBS in a note.
