Amid a profit warning, Stellantis (STLA, Financial) CEO Carlos Tavares is reportedly considering a significant management overhaul. This may be proposed at the company's board meeting in the United States. The potential restructuring or layoffs could affect various departments, from finance to regional heads and brand executives.
The board will also discuss Tavares' future, as his contract is due to expire in early 2026. Last month, reports emerged that Stellantis Chairman John Elkann has already started seeking a successor for Tavares. Stellantis declined to comment on these reports.
Recent challenges have led to substantial cuts in Stellantis' annual profit and cash flow forecasts. Although European competitors are also struggling with declining demand, the severity of Stellantis' warning has raised questions about its governance. Whether the board will back Tavares' restructuring plan remains uncertain, with various possibilities on the table. The board's focus includes efforts to turn around its most profitable market, the U.S.
Following these developments, Stellantis' U.S. stock saw an increase of up to 3.2%, although the stock has dropped about 42% this year. The company has been dealing with excess inventory, executive departures, and declining U.S. sales after outpacing peers in price hikes. John Elkann, who is also CEO of Exor NV, highlighted increasing dissatisfaction with North American operations.
After attending the board meeting, Tavares will head to Italy for a parliamentary hearing, where the country has expressed concerns over declining auto production and desires increased output from Stellantis.
