CNBC: Stellantis CEO Carlos Tavares Didn’t Get the U.S. Market, and the Hemi Was a Victim

We’ve told you about Carlos Tavares’ abrupt departure as CEO of Stellantis, the world’s fourth-largest automaker, and we’ve outlined what his successor must do to reverse the company’s downward trends.

And now CNBC has done a deeper dive on Tavares’ tenure as CEO. Multiple anonymous sources in the story mentioned Tavares’ “arrogance,” including overruling his U.S. executives about keeping the popular Hemi V-8 engine. “’Everybody wanted to keep [Hemi],’ said one source. But it was, ‘You need to be greener’ and there was little to nothing they could do to change the decision.”

Some additional takeaways from the story:

—Tavares was a student of a previous boss, Carlos Ghosn, the former head of Nissan, who believed you could cost-cut your way to success. “Several former or current leaders, as well as other U.S. employees with the trans-Atlantic automaker, said Tavares’ relentless focus on cost-cutting, his goal of achieving double-digit profit margins under his ‘Dare Forward 2030’ business plan, and a reluctance, if not unwillingness, to listen to U.S. executives about the American market led to the company’s current situation and, ultimately, Tavares’ departure last week.”

—Tavares believed the (immediate) future was electric, and it’s no secret that sales of all-electric vehicles are suffering in the U.S. “Several sources said executives tried multiple times to deprioritize the company’s emphasis on electric vehicles or, at the very least, launch gas-powered models before EV models to maintain sales, but Tavares was dismissive of such actions,” the CNBC story said.

—The company’s U.S. dealers, especially those selling the Dodge and Chrysler brand, have been starved for new products, in part due to Tavares’ lack of understanding of this market. “Those issues came even as executives said they were dealing with previously reported problems with delays in new products, cutting low-margin vehicles such as the gas-powered Jeep Cherokee and Dodge Charger and Challenger without any replacements ready, and waging battles over costs with suppliers, dealers, and the United Auto Workers union, among other ‘arrogant’ mistakes in the U.S.”

—Tavares’ habit of micromanaging and overruling his executives in the U.S. resulted in a massive loss of talent, the story said. “Such issues led to an exodus of executives, such as Tim Kuniskis, a prior Swiss Army knife for the automaker, who this week returned to the company; global Jeep head Christian Meunier; longtime Jeep North America executive Jim Morrison; and newer leaders, such as Mamatha Chamarthi, who headed the automaker’s software business development, and Chief Financial Officer Natalie Knight. Stellantis North America head Mark Stewart left the company in January to become CEO of Goodyear Tire and Rubber Company.”

So now a search is underway to find a replacement for Tavares, which is expected to happen by mid-2025. The permanent CEO could well be the man who is presently the acting CEO, if he wants the job: 48-year-old John Elkann, described by Fortune magazine as an “enigmatic billionaire,” is the great-grandson of Giovanni Agnelli, who founded Fiat. Elkann, who reportedly inherited $2 billion after the death of his grandfather, is the chairman of Ferrari.

Elkann recently toured some of Stellantis’ U.S. sites and presided over a leadership conference at the company’s headquarters just outside Detroit. Again, quoting CNBC and one of its unnamed informants: “The source, who attended the U.S. town hall, said Elkann made no indication of revisiting any decisions. However, they confirmed the company has ended a surgical cost-cutting program internally named ‘Darwin’—a nod to Tavares saying the auto industry was in a Darwinian period, in which only the strongest survive. ‘Darwin is dead because we intend to survive,’ Elkann said, according to the source.”