Carlos Tavares resigns: Inside the tumultuous reign at Stellantis
Carlos Tavares, who resigned from his position as CEO of Stellantis on December 1, was a controversial figure, and many in the industry had been anticipating such a decision. He was described as a psychopath, and dealers wrote him an open letter.
Carlos Tavares began his career in the automotive industry at Renault, then held significant positions at Nissan before returning to Renault in 2011, where he became the Chief Operating Officer. Even then, he proved to be quite controversial when he publicly suggested that he should lead a car conglomerate.
While he didn’t explicitly say it was about Renault, Carlos Ghosn, then head of Renault, felt offended and asked Tavares to apologize to his staff for the gaffe. Tavares refused and left Renault in 2013.
By the following year, he became the CEO and Chairman of the PSA Group, following his plans. Tavares is an ambitious person who seeks to achieve his goals at any cost, which became evident during his time at the newly-formed Stellantis group (the merger of 15 brands from PSA Group and Fiat Chrysler Automobiles).
At Stellantis, which required rescuing from crisis, he implemented substantial cost cuts. This naturally affected the workforce, who criticized him for demanding a high salary. His $40-million salary in 2023 made him the highest-paid CEO among traditional car manufacturers.
However, one cannot deny his effectiveness because in recent years (up to 2023), Stellantis achieved significant profits, sometimes with government support, even in the US. However, the last months of 2023 and the year 2024 were not the best for Stellantis, as a result of radical cost-cutting. This led to factory closures, layoffs, and a limited model range to replicas of a few cars, ultimately discouraging customers. Tavares even threatened to shut down unprofitable brands – implicitly Maserati, DS, and Lancia. However, such decisions were never made.
"Efficiency psychopath"
During a visit to a factory in Rennes, he was asked by labour unions about the future of the workers. Tavares replied that he had no answers to such questions because we live in a chaotic world.
"Carlos Tavares came to us with empty promises. As usual, he expects more from the employees but gives only the minimum," commented Laurent Valy, secretary of the largest labour union in Rennes, on the CEO's words.
Following this event, a journalist from France's "20minutes" called Tavares a "self-proclaimed efficiency psychopath" in his article. Generally, Tavares did not like the media, especially negative press about the Stellantis group. He even had an article about the company's issues removed from the French magazine "Automobiles," which caused a stir in the media world.
Letter from dealers
In October 2024, an official open letter from the National Council of Stellantis Dealers in the USA was published, addressed to Carlos Tavares. Not to the conglomerate or the board of directors but directly to the chairman.
Let me remind you, Stellantis also includes Dodge, Chrysler, Jeep, and Ram. At the expense of these brands, Tavares developed others while recording huge profits in other markets. The letter stated, among other things:
"The market share of these brands has nearly halved, Stellantis' stock price is dropping, factories are closing, layoffs are massive, and key managers are leaving the company. Legal proceedings from investors, suppliers, strikes – the consequences are accumulating. Your distribution network, the dealership network, has largely been destroyed, weakened, anemic."
Further stated:
"The bill for the decisions you made to achieve profits in 2023 has just arrived, and your attempt at a soft landing on the backs of employees, dealers, and suppliers is simply wrong. It was not us who created this problem, it was not the federal government who created this problem, it was not the UAW labour unions who created this problem, and it was not your employees who created this problem – you created it."
As the wind blows
Carlos Tavares will be remembered as the head of a car conglomerate who frequently changed his mind. Since he always relied solely on his opinion (without considering others'), he withdrew Stellantis from the European Automobile Manufacturers Association (ACEA). This was rather surprising, with the reasoning being the association members' agreement on the ban of registering combustion vehicles after 2035.
Looking back in time, he was right in claiming that selling a large number of electric vehicles at the cost of lowering their prices would be associated with restructuring, and thus layoffs. Didn't that happen at Volkswagen?
He took a realistic approach to the future of electric cars and repeatedly emphasized that enforcing a switch to emission-free vehicles would restrict mobility for the middle class and lower earners. He was staunchly against lowering electric car prices.
"If you lower prices without considering real costs, you're headed for disaster. I try to avoid the race to the bottom," he stated.
He also noted the problem of less affluent people who would not be able to afford an electric car, if they could afford any car at all in the future.
"We'll take away a family's combustion car worth $10,600 and tell them they will now have to buy a car for $31,800. Even if the government pitches in $3,200, the rest will still have to be paid. This is no longer merely an industry issue but a social one," Tavares explained in an interview with Mateusz Lubczański.
Over time, he shifted course towards full electromobility, announcing that there is now no turning back, and by mid-2024 he even began opposing the lowering of emissions targets. Perhaps contrary to the industry, or perhaps to prove his point.
Tavares became an advocate of electromobility. He became known for stating that in 2025, under new CO2 limits, he would first sell the planned quota of combustion vehicles and then withdraw them from the market, leaving only electric vehicles available. Some voices suggested this move was Tavares's attempt to show people what 2035 might look like.
In a conversation with Mateusz Lubczański, he made an interesting statement: "We will produce anything you want to drive. You just have to consider how far someone can go in telling you what's good or bad for you."
While many things could be said about him, his statements never lacked a rational approach to the future of the automotive industry. He put the Stellantis group back on its feet, although many believe those feet were fractured in 2024. We will wait and see what the next head of Stellantis will do and where Carlos Tavares will find himself during this time.
