The sudden resignation of the CEO of multinational car company Stellantis has added more uncertainty to the company's previously plummeting job performance.
On December 2nd, Stellantis Group announced that the board of directors had accepted Carlos Tavares' resignation as CEO of Stellantis Group on December 1st, with immediate effect. The appointment of the new CEO will not be finalized until the first half of 2025, during which a temporary executive committee led by Chairman John Elkann will assume management responsibilities.
The stock price, which has been continuously declining due to poor performance, has once again been dragged down. On December 2nd local time, the US stock market closed with Stellantis falling 6.29% to $12.37 per share.
Originally, Tang Weishi's contract would only expire in 2026, and the group had previously stated that it would start searching for a successor in the first half of 2025. According to foreign media, Tang Weishi's resignation was due to disagreements between himself, major shareholders, and the board of directors in recent weeks, as well as poor performance.
Henri de Castries, Senior Independent Director of Stellantis, revealed that in recent weeks, the disagreements between major shareholders, the board of directors, and Tang Weishi have reached their peak, leading to him submitting his resignation.
Stellantis Group owns car brands such as Fiat, Peugeot Citroen, Maserati, Chrysler, Jeep, etc. It is the fourth largest car manufacturer in the world by sales. In 2021, it was formed by the merger of Fiat Chrysler Automobiles and Peugeot Citroen Group.
Tang Weishi has been widely praised for leading this collaboration and making Stellantis one of the world's most profitable car companies. In addition, during Tang Weishi's tenure, he led the group's investment in China's new car making force, Zero Run Automobile, and Stellantis is currently the main shareholder of Zero Run Automobile.
And Tang Weishi's resignation came at a time when the car manufacturer was in trouble.
Stellantis' performance has severely declined, and Tang Weishi's strong cost reduction has triggered a chain reaction
In September of this year, the company issued a profit warning for its 2024 performance due to poor sales in North America. Stellantis stated that the deteriorating global industry background has resulted in lower market forecasts for 2024 compared to earlier forecasts. At the same time, due to the increase in industry supply and intensified competition from China, competition has become even more intense.
According to the financial report, Stellantis achieved a net revenue of 33 billion euros in the third quarter, lower than analysts' forecast of 35.9 billion euros, a year-on-year decline of 27%. This is mainly due to the reduction in shipment volume, product pricing, and the impact of foreign exchange. In the third quarter, the shipment volume of the group excluding its joint ventures was 1.148 million units, a year-on-year decrease of 20%.
As a car company with the North American market as its main source of revenue, Stellantis Group's delivery volume in the North American market decreased by 36% year-on-year in the third quarter, the highest decline among major regional markets. In its hometown European market, the situation is also not optimistic. In the third quarter, Stellantis' delivery volume in the European region decreased by 17% year-on-year. In the Chinese market, Stellantis Group's only remaining Dongfeng Peugeot Citroen has also performed poorly, with sales of only 37700 vehicles in the first half of this year, a year-on-year decline of 14.77%.
In the capital market, Stellantis' stock price has fallen by over 40% since the beginning of this year.
In order to turn the situation around, Tang Weishi made cost reduction an important task for Stellantis.
CNBC reported that its cost cutting measures include reshaping the company's supply chain and operations, reducing the number of employees in the United States, and increasing job opportunities in low-cost countries such as Brazil and Mexico. According to public documents, Stellantis will lay off 15.5% of its workforce, approximately 47500 people, between the end of 2019 and the end of 2023.
Stellantis also announced last month that it will indefinitely lay off over 1000 employees at its Jeep assembly plant in Ohio, focusing on "restructuring its US business to ensure a good start in 2025.
With the advancement of cost reduction, the resentment between Stellantis management and Tang Weishi is becoming deeper and deeper. Several current and former Stellantis executives have expressed to the media that these layoffs are too severe and have led to problems in the United States. According to informed sources, he had significantly reduced IT expenses, causing the company's system to lose tracking of thousands of cars' locations in France; A supplier has been informed that they are unable to receive payment because the person handling the payment is on maternity leave and the company has not hired a replacement.
The layoffs further triggered opposition from the union. The United Auto Workers Union has been calling for the recall of Tang Weishi for several months.
Some analysts believe that Tang Weishi's poor management of the US market, lack of investment in product updates, and extreme cost cutting measures have led the company to gradually move towards its current situation.
Zero Run Motors, invested in China, has achieved remarkable performance
On October 26, 2023, Leapmotor announced that European automotive giant Stellantis Group plans to invest approximately 1.5 billion euros to acquire approximately 21% equity in Leapmotor; On November 20, 2023, the subscription was completed and Stellantis became its major shareholder.
On May 14th of this year, Zero Run Automotive announced that the joint venture company Zero Run International, led by Stellantis Group, was officially established in a 51% to 49% ratio between Stellantis Group and Zero Run Automotive. The joint venture company has the exclusive right to export and sell Zero Run cars to all global markets outside of Greater China, as well as the exclusive right to manufacture Zero Run car products locally.
In China, the situation of zero running cars is very good. It should be pointed out that Stellantis' announcement of investment is an important turning point for Zero Run Motors in terms of sales and performance.
Data shows that Zero Run delivered 40200 vehicles in November, a year-on-year increase of 117%. For the first time in a single month, deliveries exceeded 40000 vehicles, setting a new record for monthly deliveries for six consecutive months. Meanwhile, Zero Run has also become the first car company to achieve this year's sales target. From January to November 2024, the cumulative delivery of Zero Run cars reached 251200 units, a year-on-year increase of 100%, achieving the sales target of 250000 units for 2024 ahead of schedule.
According to the financial report, Zero Run achieved a revenue of 9.86 billion yuan in the third quarter of 2024, a month on month increase of 83.9% and a year-on-year increase of 74.3%; The net loss attributable to equity holders of the company was RMB 690 million, a decrease of 30.3% compared to the net loss of RMB 990 million in the same period last year, and a decrease of 42.5% compared to the net loss of RMB 1.2 billion in the second quarter; The gross profit margin for the third quarter was 8.1%, and for the second quarter it was 2.8%, showing a significant improvement compared to the previous quarter.
Although supported by Stellantis, Zero Run also faces significant challenges in terms of going global.
At present, there is a clear trend of slowing down the electrification of overseas automobile markets such as Europe and America.
Previously, Zero Run revealed that they are already searching for suitable locations and leveraging the advantages of their partnership with Stellantis to establish Zero Run factories in Europe. Within two years, the sales of Zero Run will still rely on the domestic market.
According to media reports, after the news of Tang Weishi's departure was revealed, the relevant person in charge of Stellantis stated on social media that "Tang Weishi's departure from Stellantis Group will not affect the cooperation between Stellantis Group and Leapmotor