Automotive giant Stellantis (STLA, Financial) saw its stock fell about 8.3% on Monday to its lowest in over two years after CEO Carlos Tavares's sudden resignation. His departure piles more uncertainty on Stellantis as the company struggles with overcapacity and high inventory levels in the U.S. market. Weak car market demand globally and increasing rivalry from China's auto industry have added to the company's problems. Tavares faced heavy criticism from investors following the company's profit warning in September, in which it predicted a cash burn of up to $10.6 billion for 2024, primarily due to poor sales and inventory problems in North America.
The profit warning led to a broad reshuffle of the group's senior management, including the replacement of its CFO and head of North American operations, but did not at first affect Tavares. After that, however, Stellantis said Tavares was not interested in a new CEO term and would retire at the end of his current term in early 2026. In September, Stellantis made an announcement stating that it had been in search of a successor, which it said was a normal process. More recently, the company announced that it will look for a new CEO by the middle of 2025 with the current interim executive committee in leadership of John Elkann.
