The reign of Carlos Tavares in Starry it’s over. Once hailed as the best manager the legacy automotive industry had to offer, CEO resigned on Sundaytaking responsibility for the rapid and stunning decline of parent company Jeep and Ram.
His place will be taken over for the time being by John Elkann, chairman of the board and Fiat heir. ua statement of Tavares’ resignation, Stellantis said he immediately tasked the billionaire scion with leading the newly formed Interim Executive Committee in addition to his management and oversight duties until a successor is found.
“Together, we will ensure the continued implementation of the company’s strategy in the long-term interests of Stellantis and all of its stakeholders,” Elkann said, the latter of which likely refers not only to his workforce, but also to struggling U.S. retailers.
The automaker said a special board of directors will now hire a permanent replacement for Tavaresadding that the search is already “well underway.” This suggests that the question of whether the CEO jumped or was pushed is largely academic because trust was already irreparably damaged – a conclusion supported by the text of the statement.
“Different points of view have emerged in recent weeks, resulting in today’s decision by the board and the CEO,” senior independent director Henri de Castries said in a statement.
It’s a complete turnaround for Stellantis, which has acquired ownership of a dozen car brands, including Fiat, Peugeot and Opel thanks to two transformational merger deals completed over the past decade. Tavares was the architect of the lattermerging France’s PSA with Elkann’s Fiat Chrysler Automobiles in 2019.
Earlier this year, the car manufacturer announced record annual resultsonly to be plunged into crisis within months, culminating in open rebellion by his North American traders. The blame for the company’s recent woes was firmly placed on the now former CEO.
Problems in the US market are largely the reason why Stellantis fell two places in the global vehicle sales rankings, to sixth place so far this year.
Who is John Elkann?
The 48-year-old traces his origins to none other than his great-great-grandfather Giovanni Agnelli, who laid the foundation for the Italian automotive industry when he built Fabbrica Italiana Automobili Torino, or FIAT, in 1899 in the northern city of Turin.
No modern Italian dynasty can be considered more royal than theirs. WITH tragedy is a constant companion to fameit drew frequent comparisons to the Kennedy dynasty.
In 1997, the nephew of the charismatic patriarch Gianni Agnelli died of cancer in his early thirties, leaving the family without a designated heir. Not long after that, Gianni’s only son died in what it looked like suicide.
In 2003 he came death of Agnelli himselfwith his younger brother Umberto finally taking over the reins, just yes pass a little over a year later.
Elkann, the son of Gianni’s daughter Margherita, later took over the family business after previously joining Fiat’s board when he was just 22. But the family’s dealings with tragedy did not end there.
His younger brother Lapo, an eccentric playboy and fashionistahe nearly died of a drug overdose in 2005. More recently, Elkann has found himself in the middle protracted legal battle due to an inheritance that put him directly at odds with his own mother.
Can Elkann remain in charge of Stellantis?
Elkann has business skills and experience. Elon Musk may be the longest-serving CEO of a major automaker, but Elkann has been groomed to look after Fiat since his early twenties.
However, while it is entirely conceivable, it is unlikely.
Much like the Porsches behind Volkswagen or the BMW-controlled Quandt, Elkann has long shied away from directly running the day-to-day operations of his family’s automotive empire.
Instead, he entrusted the task to a class of professional managers while he focused on his role as CEO of Exor, an investment vehicle created to maintain and diversify the family’s wealth through active management of portfolio holdings in sports clubs, newspapers and insurers, among others.
A company spokesman declined to comment Wealth beyond what was in the company’s press release, simply saying “stay tuned” for more details to come, including the exact composition of the Interim Executive Committee.
Tavares was Elkann’s second transformational CEO after Sergio Marchionne, who took advantage of Chrysler’s struggles to gain a controlling stake after its 2008 bankruptcy. In 2014, the famous workaholic and heavy smoker acquired full ownership, creating Fiat Chrysler Automobiles. His sudden death four years later from complications of shoulder surgery accelerated the search for a partner who became Tavares’ PSA.
Why did Tavares have to leave?
Starry shocked the market in September after warning it would move plans to liquidate a bloated U.S. vehicle inventory at low prices if necessary. The ensuing reduction in projected profit margins revealed bigger problems than previously believed.
Earlier that month traders Tavares broke down for a strategy they argued prioritized short-term success at the cost of long-term problems, just so he could inflate 2023 results and pocket nearly $40 million in compensation—more than any other peer at the legacy automaker.
This time, however, the company was quick to point out that Tavares won’t be leaving an even bigger mess behind for Elkann to clean up. Stellantis confirmed on Monday that it remains on track to meet its revised guidance for the full year.
That didn’t seem to bolster investor confidence: The automaker’s shares fell more than 8% in European trading and will be sharply lower when the bell rings on the Big Board in New York.
Elkann, however, paid tribute to Tavares for first rescuing the French carmaker behind Peugeot and Citroen before returning Opel to health after a generation of mismanagement under the previous owner. General Motors.
“Our thanks go to Carlos for his years of dedicated service and the role he played in the creation of Stellantis,” said Elkann.
