Stellantis’ announcement on Thursday that CEO Carlos Tavares will retire at the end of his contract in early 2026 failed to inject optimism in shareholders with the company continuing a downward trend that has seen the stock drop 45% year-to-date.
The company said it now planned to name his successor by the fourth quarter of 2025.
The share price of the struggling Netherlands-headquartered auto major was trading lower by more than 3.8% at 12:18 pm, GMT+2.
Shareholders seem wary of the company’s future, particularly as Stellantis grapples with significant challenges in its North American operations.
Announcement fails to address core concerns behind company’s struggles
Analysts suggest that the retirement announcement, while important for the company’s leadership transition, has not addressed core concerns driving Stellantis’ current struggles.
One of the primary factors behind Stellantis’ stock decline is the automaker’s disappointing performance in North America.
Jeep and Ram, which have historically been key profit drivers, have seen sales falter, and the company’s pricing strategies have not resonated with consumers.
High dealer inventories and weak demand have compounded these issues, leading to declining earnings and a downgraded profit forecast for 2024.
RBC analyst Tom Narayan expressed skepticism over whether recent senior management changes could reverse the company’s North American woes. He said,
It remains unclear how the management changes will reverse trends around Stellantis’ issues rooted in aggressive pricing in North America and high dealer inventories.
His remarks reflect broader uncertainty about the effectiveness of the company’s leadership shake-up.
What do the leadership changes entail?
In a statement issued late Thursday, the group said,
To drive simplification and enhance organisational performance in a turbulent global environment, Stellantis today announced targeted management changes, effective immediately.
Doug Ostermann, the former chief operating officer of Stellantis’ China division, will replace Natalie Knight as finance chief, while Antonio Filosa will take over as North America chief operating officer, succeeding Carlos Zarlenga.
Uwe Hochgeschurtz, who was in charge of European operations, will be replaced by Jean-Philippe Imparato.
Despite these changes, many investors remain unconvinced that the restructuring will be enough to stop the company’s downward spiral.
Bernstein analysts highlighted Stellantis’ loss of credibility with investors, particularly after the automaker dismissed concerns over its US inventories and pricing for months, only to cut its guidance in late September.
The company in September said it expected an adjusted operating income margin of 5.5% to 7.0 percent%, not the double-digit growth it had anticipated.
Today’s management reshuffle adds to a growing list of senior management changes (21 in the last 12 months) and will likely be unable to calm investors’ nerves.
With Stellantis’ stock sliding and North American operations continuing to struggle, analysts are divided on the company’s future.
JPMorgan analysts were somewhat more optimistic, viewing the leadership changes as a sign of renewed focus.
They believe the company’s decision to identify a successor for Tavares by the fourth quarter of 2025 provides some long-term clarity.
However, the company’s immediate future remains clouded by uncertainty.
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