How Stellantis CEO’s cost-cutting mantra cost him his job

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Subscribe to enjoy similar stories. A ruthless focus on efficiency made Carlos Tavares a giant of the automotive industry. It was also his undoing at Stellantis.

Tavares resigned Sunday as chief executive officer of the Chrysler owner after losing the confidence of the board and key shareholders. In a statement, the company pointed to the emergence of “different views" in recent weeks. The leadership change caps a dramatic fall from grace for a company that Tavares created through a blockbuster 2021 merger and turned into a profit powerhouse during the pandemic.

This year, a drop in sales has led to mounting inventories and a sharp fall in the company’s share price. Stellantis stock lost a further 6% Monday. Despite the challenges, Stellantis’s board had given Tavares its unanimous backing to turn the automaker around as recently as October.

Since then, his renewed pursuit of cost savings and other efficiencies inflamed already fractious relations with dealers, suppliers and politicians, according to people familiar with the matter, prompting concern among board members. “The machine was being driven too aggressively," one of the people said. One focus for Tavares was ensuring that the company beat its cash-flow guidance for the year, according to some of the people familiar with the matter.

This would involve delaying payments to parts suppliers, bringing a cash windfall this year at the expense of 2025 while also putting stress on key business partners, the people said. The board worried that the move would risk long-term relationships with suppliers on which the company depends, the people said. The board also became increasingly concerned about Tavares’s handling of unions and politicians in its home countries, the