PARIS (Reuters) – Stellantis shares fell to a two-year low on Monday the day after the announcement of the sudden resignation of Carlos Tavares, general director of the group since its creation, following differences with the main shareholders and the board of directors of the automobile manufacturer born from the merger between PSA and FCA.

Around 11:00 a.m., the stock of the world’s fourth largest automobile group lost 8.47% on the Milan Stock Exchange, compared to a decline of 0.8% for the CAC 40 index at the same time.

“Investors seeking to invest in a company with such volatility in the management team find themselves facing an unprecedented challenge,” JPMorgan analysts commented in a note, noting that the departure of Carlos Tavares follows that of the financial director.

Stellantis shares are set to suffer their biggest drop in a single session since the end of September, when the group signed its spectacular “profit warning”. The loss on the stock market since the start of the year has now reached 45%, the heaviest of all automobile competitors in Europe.

“Stellantis’ difficulties continue to cast doubt on the business model of the global brand conglomerate (…) as well as on the longevity of the CEO in an automotive industry experiencing such structural and cyclical difficulties,” add the Jefferies analysts. in a note.

Born in 2021 from the merger between PSA, Opel and FCA, Stellantis has no less than 14 brands.

UNANIMOUS BOARD DECISION

“The success of Stellantis since its creation has been based on perfect alignment between the key shareholders, the board of directors and the CEO. However, in recent weeks, different points of view have emerged, which has led the board to administration and the CEO to today’s decision”, explained Henri de Castries, senior independent director of Stellantis, quoted in the press release published by Stellantis on Sunday evening.

A source familiar with the matter told Reuters the board made its decision unanimously.

According to another source, the directors judged that Carlos Tavares wanted to move too quickly to correct the operational difficulties encountered in North America, and that he favored the short term to preserve his reputation, which was not in the best interest of the company. band.

Jeff Laethem, owner of a Stellantis dealership in Detroit, said he was relieved by the departure of Carlos Tavares, after a year marked by swelling inventories and falling sales.

Until now one of the most respected leaders in the automobile industry, architect of the recovery of PSA and Opel, of the creation of Stellantis and accustomed to double-digit financial performances, Carlos Tavares found himself this year target of strong criticism for a sharp deterioration in the manufacturer’s operational performance in the United States.

This contributed to a spectacular warning on the group’s annual financial objectives in the fall, which led to a vast reshuffle at the head of the group, including the departure of the financial director and the head of North American activities, while sparing the general manager.

Carlos Tavares, however, subsequently indicated that he would not seek a new mandate after the end of his current mandate, at the beginning of 2026, and that he would then retire.

Fabio Caldato, portfolio manager at AcomeA SGR, which owns Stellantis shares, said “new ideas and new forces were needed to project the future of the company.”

THE SUCCESSION PROCESS “ON TRACK”

The group, which notably said it expected a cash hemorrhage of up to ten billion euros in 2024, confirmed on Sunday evening the annual objectives presented on October 31.

“The process of appointing the new permanent CEO, managed by a special committee of the board of directors, is on track and will be completed during the first half of 2025,” Stellantis added in its press release. “In the meantime, a new temporary executive committee, chaired by John Elkann, will be established.”

This process was initially expected to conclude in the fourth quarter of next year.

John Elkann is also CEO of Exor, the holding company of the Agnelli family, founder of Fiat, main shareholder of Stellantis, followed by the holding company of the Peugeot family, founder of PSA, and the French State via BPIfrance.

“We knew that Carlos Tavares was in the hot seat (…) but we now need to find a more serene social climate (and) to restore strong stability in the teams, to ensure generational renewal and to stop the skills drain”, reacted Benoît Vernier, CFDT representative at Stellantis.

(Gilles Guillaume, Corentin Chappron, Enrico Sciacovelli, Allessandro Parodi, Giulio Piovaccari and Nora Eckert, edited by Kate Entringer)

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