Interface News Reporter | Yang Shihan
On December 1st local time, Stellantis Group announced that the Stellantis Group Board of Directors, chaired by John Elkann, has accepted Carlos Tavares' sudden request to resign from his position as CEO, effective immediately.
The company stated that the process of appointing a new CEO is progressing smoothly and is expected to be completed in the first half of 2025. Prior to this, Stellantis Group will establish a new interim executive committee chaired by Chairman Elkann.
At the time of Tang Weishi's resignation, the differences between the executive team and the board of directors may be intensifying. Henri de Castries, Senior Independent Director of Stellantis Group, stated that the core of the group's success lies in the collaboration between shareholders, the board of directors, and the CEO. However, in recent weeks, there have been differing opinions within the group, leading to the board and CEO making the aforementioned decision.
Tang Weishi's decision to resign came a month and a half after Stellantis announced that he would retire after his contract expires in early 2026. At that time, the group stated its plan to determine a successor candidate before the fourth quarter of next year.
Since the merger of PSA Group and Fiat Chrysler Automobiles in 2021, Tang Weishi has been serving as the CEO of Stellantis. He once worked at Nissan North America and turned losses into profits within a year through layoffs and cost cutting. Its emphasis on efficiency and profit continued into the merged Stellantis, and under the leadership of Tang Weishi, the group became the most profitable car manufacturer in Europe last year.
In April of this year, Stellantis shareholders approved the payment of a total compensation of up to 36.5 million euros to Tang Weishi, with a high approval rate of 70% from investors. This salary plan has increased by nearly 60% compared to 2022, and the industry rumors suggest that the total amount far exceeds that of General Motors CEO Mary Barra and Ford CEO Jim Farley.
It should be pointed out that a problem with the group during Tang Weishi's tenure was that the operation in the Chinese market was always unsatisfactory. Most of the car brands under its umbrella that enter the Chinese market have resulted in delisting or struggling operations, such as Beijing Jeep, GAC Fiat, Dongfeng Peugeot, Dongfeng Citroen, etc. Its joint venture in China, GAC FCA, has filed for bankruptcy, and Dongfeng Motor is also on the edge of the market.
Faced with the trend of energy transformation, Tang Weishi chose to operate light assets in China and joined forces with the new Chinese car making force, Zero Run. The two sides officially established Zero Run International in May this year, with Stellantis Group and Zero Run Automobile holding 51% and 49% of the shares respectively.
Tang Weishi believes that Stellantis Group needs to maintain a certain level of exposure in China when it is not considered successful in the Chinese market. "To win the Chinese market, it is best to first obtain the help of a well-developed company in China
Zero Run International was the first to sell the Zero Run T03 and C10 models in countries such as Belgium, France, Germany, and the United Kingdom. However, the timing for Zero Run International to enter Europe is not entirely ideal, as the current declining demand for electric vehicles and higher import tariffs will pose challenges.
A European insider from a new car manufacturing force told Jiemian News that due to geopolitical turmoil, European consumers' attitudes towards Chinese new energy vehicle models have also diverged. "What companies can do is to capture as many consumer groups as possible who have a good impression of Chinese brands, and at the same time, make appropriate marketing efforts according to local conditions
In the North American market, due to poor fund management and a lack of investment in new products, Stellantis' performance was significantly lower than expected, with the group's delivery volume dropping by as much as 36% in the third quarter; Its largest market, Europe, also saw a 17% decline in quarterly delivery volume.
In the third quarter of this year, Stellantis' net revenue decreased by 27% year-on-year to 33 billion euros, falling short of analysts' expectations of 35.9 billion euros.
The group has lowered its annual adjusted operating profit margin forecast to 5.5% to 7.0%, far below its previous double-digit target, and its free cash flow forecast has also been adjusted from positive to negative 5 billion to 10 billion euros.
Short term business fatigue has become apparent, and Stellantis has been evaluated by foreign media as one of the most frustrated old car manufacturers this year. Tang Weishi is also considered a traditional car company executive who is under considerable pressure.
According to CNBC, Tang Weishi has identified cost cutting as an important task for Stellantis, including reshaping the company's supply chain and operational model, reducing the number of employees in the United States, and increasing job opportunities in low-cost countries such as Brazil and Mexico. However, several Stellantis executives have stated that these layoffs are too severe, leading to further problems in the US market.
Due to union members facing job loss, the United Auto Workers Union has been calling for the dismissal of Tang Weishi for months. At the same time, due to excess inventory and lack of financial support to sell cars, Stellantis' US dealer network also opposes Tang Weishi.
After Tang Weishi resigned, Stellantis Group confirmed that its previously released full year financial performance expectations for 2024 remain unchanged. The stock price of Stellantis has fallen by about 40% this year.
Daniel Roeska, an analyst at investment bank Bernstein, said that the current chairman of the board, Elkann, has shown sensitivity in selecting a new CEO in the past. "The board will carefully decide on candidates, and the transition period will be difficult for both the company's management and investors.