The boss of car-making giant Stellantis, Carlos Tavares, has quit with immediate effect following a boardroom clash.
His abrupt exit from the company – which owns brands including Vauxhall, Jeep, Fiat, Peugeot and Chrysler – comes two months after Stellantis issued a profit warning.
Last week, the firm also announced plans to close its Vauxhall van-making factory in Luton, putting about 1,100 jobs at risk.
Before his resignation, Mr Tavares was one of the most powerful people in the global motor industry.
In a statement announcing Mr Tavares’ departure, Henri de Castries, Stellantis’ senior independent director said: “Stellantis’ success since its creation has been rooted in a perfect alignment between the reference shareholders, the board and the chief executive.
“However, in recent weeks different views have emerged which have resulted in the board and the chief executive coming to today’s decision.”
Mr Tavares had a reputation as a ruthless cost-cutter.
He made his name at Renault, working with the colourful and controversial chief executive, Carlos Ghosn, before taking the top job at PSA Group.
At the time, the French group was close to bankruptcy. He was credited with turning it around before orchestrating a merger with Fiat Chrysler to form Stellantis in 2021, creating a global giant.
“He was known for being able to turn around companies that were troubled,” Hans Greimel, Asia editor at Automotive News, told the BBC.
However, Mr Tavares’ position has been undermined recently by a dramatic fall in sales and profits at the company.
“Critics would say he was just cost-cutting too much and delaying products and also hurting quality,” said Mr Greimel.
In September, Stellantis had issued a profit warning after it reported a sharp drop in sales in North America.
Dealers found themselves struggling to shift a glut of unsold vehicles, which customers simply didn’t want to buy.
The company was criticised for producing too many cars of the wrong type, failing to adapt to changing customer tastes and losing ground to more dynamic rivals.
Prof David Bailey from the Birmingham Business School, told the BBC’s Today programme that while there is “huge turmoil in the car industry generally” Stellantis has its own “particular problems”.
He said: “What’s really, really driving that, I think, is the situation in North America where they’ve had appalling results, a very dated product line-up, rising inventories and slipping market share as a result of which all the stakeholders involved – suppliers, dealers, workers, investors – are deeply unhappy.
“I think that has penetrated the board and made his position untenable.”
Stellantis’ share price has fallen by 40% since the start of this year, a far worse performance than its rivals. Following Mr Tavares’ departure on Monday, it fell further, down more than 9%.
Mr Tavares already agreed to step down in 2026, rather than extending his contract – a move that arguably weakened his position significantly.
Stellantis said it now expects to appoint a new boss by the middle of next year.
In the meantime, it will set up a new interim executive committee, headed by the firm’s chair John Elkann who is a member of the powerful Agnelli family of Italian industrialists.
Mr Elkann controls a significant voting stake in the group on behalf of his family.
He is the one currently leading the search for Mr Tavares’ successor and his views will be crucial in shaping the future of the automotive giant.
Mr Tavares frequently made headlines in the UK by casting doubt over the future of Vauxhall operations, linking it to issues such as Brexit and government plans to force carmakers to build more electric cars.
It is not yet clear whether his departure will affect the planned closure of Stellantis’ Luton plant.
Stellantis’s Vauxhall plant in Luton currently builds petrol and diesel vans and had been due to start making its medium-sized Vivaro electric van from 2025, before the decision to close it.
The company is now planning to combine its electric van production at its other UK plant in Ellesmere Port in Cheshire.
In Europe, Stellantis has suffered the same fate as many other manufacturers – coming under pressure from Chinese rivals at a time when take-up of electric vehicles has been more sluggish than expected.
A tie-up with the China’s Leapmotor may reap dividends, but is in its early stages.
On what the change at the top means for Luton, Prof Bailey said: “I think everything is up in the air. Whether or not that could be reversed I don’t know. One would hope but I suspect that that has gone sadly.
“…I don’t think there are any guarantees about the future whatsoever of Stellantis’s operations in the UK.”
