Carlos Tavares: A decade of successes and controversies at the helm of Stellantis

Carlos Tavares, the iconic leader of the automotive industry, announced his resignation from Stellantis on December 1, 2024, a year before his term, initially set to end in 2026, was due to expire. The 66-year-old executive was pushed out by the board of directors due to “different views” on the group’s strategy. This departure marks the end of an era, one defined by significant achievements as well as rising criticism and tensions.

A journey of turnaround and growth

Tavares joined PSA Group in 2014 after leaving Renault, where he had spent 32 years. Upon his arrival, PSA was in distress, and the French government, along with Chinese automaker Dongfeng, had to step in to prevent the company from going bankrupt. Under Tavares’ leadership, the company adopted a turnaround plan called “Back in the Race,” aimed at cutting costs and improving profitability. The results were impressive: by 2015, PSA became profitable again, driven by standout models such as the SUV 3008. Simultaneously, Tavares implemented workforce reductions and factory closures to streamline production.

In 2017, PSA made a significant move by acquiring General Motors’ European division, Opel, for €1.3 billion. This strategic acquisition enabled the group to become the second-largest automaker in Europe, just behind Volkswagen. Tavares successfully transformed Opel, which had been losing money for years, into a profitable brand within a few years.

The merger and rise of Stellantis

In 2019, Tavares led the merger between PSA and Fiat Chrysler Automobiles (FCA), creating Stellantis, the fourth-largest automaker in the world. This $50 billion megamerger brought together over 250,000 employees and 14 iconic brands, including Peugeot, Jeep, Citroën, and Fiat. Under Tavares’ leadership, Stellantis set financial records, with net profits reaching €18.6 billion in 2023, driven by a strong cost-cutting strategy and efficient supply chain management.

Criticism and controversies

However, Tavares’ methods were not without controversy. His reputation as a “cost-killer” drew criticism, especially from labor unions. Job-cutting plans, which led to the reduction of thousands of positions, were often seen as a sacrifice of employees to maximize profits. Additionally, Tavares’ strategy of relocating production to low-cost countries such as Morocco and Brazil created tensions, including with the Italian government led by Giorgia Meloni.

Tavares’ compensation also sparked outrage. In 2023, his pay, including performance bonuses, reached €36.5 million, a figure that many observers and political figures deemed “shocking.” Tavares defended his salary, stating that he would continue to adhere to the law as long as it allowed.

A term marked by challenges

The global automotive market began to deteriorate starting in 2024, primarily due to the chip shortage and rising costs. These challenges impacted Stellantis, which saw a 48% drop in net profit in the first half of the year and revised its profitability targets downward. The group also faced the need for mass recalls due to Takata airbag issues and technical problems with certain engines.

Carlos Tavares’ sudden departure, welcomed as a relief by some Stellantis unions, closes a chapter defined by notable successes but also difficult and controversial decisions. The board cited “strategic disagreements,” noting that “different views” had led to his resignation.

Tavares leaves an undeniable mark on the industry, but his departure now raises questions about the future direction of Stellantis and whether the cost-cutting policies that defined his career will continue.