Stellantis Shares Hit Following Resignation Of CEO Carlos Tavares

(RTTNews) - Stellantis N.V. announced that Chief Executive Officer Carlos Tavares has resigned on Sunday with immediate effect, following different views about the automaker that have emerged in recent weeks. Further, the firm maintained its fiscal 2024 outlook.

Following the announcement, Stellantis shares were losing around 8.4 percent in the morning trading in Milan, as well as in pre-market activity on the NYSE.

The carmaker in early October had announced that Tavares would retire at the conclusion of his contract in early 2026. At that time, a replacement was expected to be announced by the fourth quarter of fiscal 2025. Stellantis also had announced then various targeted management changes under the leadership of Tavares, with a view to redoubling the company's focus on its key business priorities and confronting head-on the global challenges facing the industry.

In a statement, Stellantis' Senior Independent Director, Henri de Castries, now said, "Stellantis' success since its creation has been rooted in a perfect alignment between the reference shareholders, the Board and the CEO. However, in recent weeks different views have emerged which have resulted in the Board and the CEO coming to today's decision."

The owner of Chrysler, Opel, Peugeot brands said its Board of Directors, under the Chairmanship of John Elkann, accepted Tavares' resignation with immediate effect, and that the new CEO will be appointed in the first half of 2025.

The process to appoint the new permanent CEO is "well under way" and managed by a Special Committee of the Board, the firm noted. Until then, a new Interim Executive Committee, chaired by Elkann, will be established.

Further, for fiscal 2024, Stellantis reiterated its financial guidance, expecting adjusted operating income or AOI margin of 5.5 percent to 7 percent.

The management shakeup comes after the auto major recently reported significantly lower revenues and shipments in its third quarter, amid transitional period of product upgrades and inventory reduction actions, mainly in the U.S.

The third-quarter net revenues fell 27 percent to 33.0 billion euros, and consolidated shipments dropped 20 percent to 1.15 million units. Combined shipments declined 21 percent from last year to 1.17 million units.

In North America, net revenues plunged 42 percent with a 36 percent drop in shipments. Enlarged Europe net revenues dropped 12 percent and shipments declined 17 percent.

Doug Ostermann, CFO, then had noted that the quarterly performance was below its potential, but there was progress in addressing operational issues, in particular U.S. inventories, which have been reduced meaningfully and were on track for year-end targets, as well as stabilization of U.S. market share.

In Milan, Stellantis shares were trading at 11.49 euros, down 8.38 percent.

In pre-market activity on the NYSE, the shares were at $12.09, down 8.41 percent.