Carlos Tavares, the former CEO of Stellantis, has been forced out by a spate of costly blunders believed to be the result of his arrogant leadership style and too much emphasis on short-term cost-cutting, people close to the matter say. Several former and current executives said that Tavares’ relentless drive to achieve very high profit margins under his Dare Forward 2030 plan has undermined the company’s product quality, employee morale, and relationships with suppliers.

Tavares’s cost-cutting strategy has mismanaged the key US operations, with bloated inventories, production cuts, and rising vehicle prices that have alienated core customers. He has also failed to support new products and dismisses input from US executives, further fueling tensions in the company. However, Tavares remains confident about his decisions, blaming any difficulties on market conditions and not on his leadership style.

Lack of response to American market, the strained relationship with labor union, and dealers resulted in increased dissatisfaction with Tavares’ tenure. On its U.S.-traded shares, Stellantis has declined by 43% in 2024 as compared to competitors with companies like General Motors. Sources had said that Tavares had walked on December 1 while saying it was a resignation due to disagreement that arose between him and the board though they had said that is when the board decided his tenure would come to an end.

After his resignation, Stellantis focuses on rebuilding the relationships that it had lost with key stakeholders, including suppliers, employees, and dealers. Stellantis announced that the new CEO would be elected in the first half of 2025 and plans to work out the difficulties that led to Tavares’ fall. Meanwhile, Stellantis Chairman John Elkann, who has assumed interim leadership, has promised to regain confidence and optimize operations, particularly in key markets such as the U.S. and Italy.