Chrysler parent Stellantis (STLAM.MI) confirmed on Thursday that CEO Carlos Tavares would retire at the end of his contract in early 2026 and announced major senior management changes as it struggles to turn around its lagging North American operations.
Earnings and sales in the French-Italian automaker's traditional profit powerhouse have been declining, forcing it to last week cut its 2024 profit forecast and signal possible reductions to its dividend and share buybacks next year.
The confirmation of Tavares' retirement plans comes weeks after Stellantis said it was searching for his successor, though at the time it said it was possible he could remain after his contract expires. The world's fourth-largest automaker by sales said it now planned to name his successor by the fourth quarter of 2025.
Stellantis appointed Doug Ostermann, the former chief operating officer of its China division, as its finance chief, replacing Natalie Knight who is leaving the company.
The automaker also appointed Antonio Filosa as its North America chief operating officer in addition to his role as Jeep brand CEO, succeeding Carlos Zarlenga, whose future role has not been announced.
Tavares, an avid race car driver who was widely heralded in prior years for making Stellantis one of the world's most profitable automakers, has led the company since its creation through a 2021 merger between Fiat-Chrysler and Peugeot maker PSA, where he had been board chair since 2014.
But the company's bloated inventories and profit nosedive in recent months have shocked industry observers after years of its sizable margins being the envy of competitors in Detroit and abroad.
"After dismissing investors' concerns on inventories and discounts in the US for the better part of the past 12 months, the company lost significant trust when they cut 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 last 12 months) and will likely be unable to calm investors’ nerves," they added.
Stellantis last week lowered its forecast from positive cash flow to negative cash flow of between 5 billion and 10 billion euros ($5.5 billion-$10.9 billion) this year.
Tavares had previously maintained that the group's 14 brands, including Maserati, Fiat, Peugeot and Jeep were all assets to Stellantis' portfolio, but in July said poor performers could be axed to cut costs.
He has faced harsh criticism from the United Auto Workers union, auto dealers and shareholders in recent months.
The broad management shakeup was meant to address these concerns, Tavares said in a statement Thursday.
"During this Darwinian period for the automotive industry, our duty and ethical responsibility is to adapt and prepare ourselves for the future," he added.
In addition to the management changes, Stellantis is also shaking up its structure by moving the supply chain organization to the manufacturing division in an effort to provide more attention to improving performance among its suppliers.
($1 = 0.9146 euros)
