Carlos Tavares leaves Stellantis. Pushed towards the exit, the head of the French-Italian-American automaker announced his resignation with “immediate effect”, a year before the end of his term. The abrupt end of a decade at PSA, which became Stellantis after the merger with Fiat Chrysler.
Leaving the Renault group, unable to climb further up the internal ladder, Carlos Tavares was quickly recruited by the PSA group to succeed Philippe Varin in 2014. He then took the reins of a manufacturer in very poor condition.
Victim of the financial crisis that has disrupted the European new car market, PSA has just been narrowly saved from bankruptcy thanks to the arrival of the French State and the Chinese manufacturer Dongfeng.
Cost reduction
When PSA officially became number 1, the group, made up of Peugeot and Citroën, recorded losses of more than 2 billion euros. Carlos Tavares does not deviate from his reputation as a “cost killer” and cuts costs to restore the French company’s margins. All industrial operations are scrutinized to streamline and eliminate waste, even if that means eliminating unprofitable models or assembly lines in certain factories. The active population went from just over 111,000 people in 2013 to just under 96,000 people in 2015.
Its recovery plan called “Back in the race” also helps transform the DS models into an independent brand, like Peugeot and Citroën. As of 2015, the PSA group became profitable again.
After the savings cure, the new strategic plan “Push to pass” (“Push to pass”, a new reference to motor sport) will happen in 2016. This time it is about taking a step forward by leading an offensive international strategy, including a return to the United States and the launch of new vehicles.
In 2017, the PSA group bought GM’s European subsidiary, adding the Opel and Vauxhall brands to its portfolio. With the acquisition of Opel, PSA is positioned as the second European manufacturer, behind Volkswagen.
Later, Carlos Tavares contributed to the founding of the Stellantis group in 2021, a project started two years earlier, the result of the marriage between PSA and FCA. From this mega-merger between the two groups, the fourth largest automobile manufacturer in the world was born, with fifteen brands in its portfolio, including Peugeot, Citroën, Fiat, Alfa Romeo, Chrysler, Jeep, Lancia and even Opel. The new Italian-French-American group, which placed Carlos Tavares as CEO, broke quarterly records in its first days of existence.
Union criticism
But, on the other side of the coin, Carlos Tavares’ methods have been periodically denounced by unions. To produce cheaper and cheaper, management puts pressure on both employees and suppliers. Employees are periodically encouraged to leave, depending on plans for job cuts. At the same time, the Franco-Italian-American group is increasingly reliant on low-cost countries such as Brazil, Morocco and Turkey to manufacture its cars, which has led to rocky relations with the Italian government headed by Giorgia Meloni.
The microchip shortage, which limited automobile production, helped Stellantis sell its vehicles at high prices. But the wheels end up seizing. The group saw its results fall in the first half of 2024, penalized by a sharp drop in volumes and losses in market share. Net profit fell 48% during the first six months of the year. The situation did not improve in the following months, weighed down by more serious than expected difficulties in North America, Stellantis’ most important region.
At the same time, the rapid electrification of the automotive sector complicates Stellantis’ prospects in this already bleak market. The group also has to manage the issue of Takata airbags, which are forcing it to launch a widespread recall campaign. Not to mention the problems with the PureTech engines. An accumulation of difficulties that will have caused the sudden departure of Carlos Tavares this December 1.
Source: BFM TV
