Stellantis CEO Carlos Tavares clashed with board before quitting as shares tumble

Outgoing CEO Carlos Tavares clashed with Stellantis’ board over his plans to quickly turn around the ailing US business by cutting costs, rather than focusing on long-term strategy, investors and bankers familiar with the matter said on Monday.Shares in the Jeep, Fiat and Peugeot manufacturer slumped as much as 10%, hitting their lowest since July 2022, as investors worried about the vacuum left at the top of the world’s No.4 carmaker following Tavares’ resignation on Sunday.

The stock closed down 6.3% in Milan trading.Stellantis is struggling to get rid of overcapacity and bloated inventory in its key North American market, at a time when global demand remains sluggish and competition from Chinese rivals, especially in electric vehicles, is intensifying.In addition to its US travails, the company’s focus on raising prices among its mass-market marques has driven away inflation-hit customers in its other important market, Europe.Stellantis had said shortly after a shock profit warning in September that Tavares would retire in early 2026, at the end of his current term.The process to select a new CEO was initially set to be completed by the final quarter of next year.Interviews with half a dozen shareholders, bankers and analysts show how quickly since then disagreements deepened between Tavares – long one of the auto industry’s most respected executives – and the board over how to resolve the crisis.A senior investment banker briefed on the matter said on Monday that the board had grown concerned about Tavares’ strategy for turning things around.In recent months, and with just over a year left of his contract, the CEO had focused mainly on cutting costs, the banker said.

The board worried that was leading to quality issues but also cramping the company’s ability to develop and design new models.Customers and dealers were furious about Tavares’ strategy, the banker said.Launches of some key models, like the new version of the popular Peugeo...