Magali Cohen / Hans Lucas / Hans Lucas via AFP
A top Stellantis executive on Wednesday gave an internal peek into CEO Carlos Tavares's abrupt exit.
Doug Ostermann, the Jeep maker's CFO, said at an investor conference that he noticed a divergence between Tavares and the company's board on two key issues: operational priorities and how leaders interacted with key stakeholders like dealers, suppliers, and unions.
Tavares stepped down on Sunday. Ostermann said Tavares and the board couldn't agree on how to run the company through the end of his tenure, previously scheduled to last until early 2026.
Most of the disagreements "related to tactical issues on how to run the business over that kind of short-term time period and what actions should be taken in regard to short-term metrics versus longer-term benefit of the company," Ostermann said in response to a question at a Goldman Sachs conference.
Critics of Tavares have argued that his cost-cutting actions, particularly in the Jeep brand, created a short-term illusion of success while fueling a long-term problem for demand in the critical US market. He cut popular models like the Jeep Cherokee and Renegade, which will now return in 2026.
His decision to step down from the top job at Stellantis came after months of pressure from disgruntled investors, dealers, and union officials.
"We need to build back trust," Ostermann said. "There's a strong desire among the management team today to really work on that — and it'll take time."
Parting ways with Tavares was a good first step in rebuilding trust, US dealers and union leaders said.
Dave Kelleher, a Chrysler-Dodge-Jeep-Ram dealer in Pennsylvania, told Business Insider he was encouraged by the company's about-face from its previous commitment to Tavares through his initial contract and saw the CEO's departure as a sign that dealers' concerns were being taken seriously.
"It was clear to me, and to other dealers, that we needed to move on quickly and get this thing on the right track," Kelleher said.
Stellantis's US sales this year through September, the most recent report, were down 17% compared to a year ago. Profit-generators Jeep and Ram posted the biggest volume losses, with Jeep ceding significant market share to competitors like Hyundai in the affordable SUV segment.
Stellantis's US dealers released an open letter to Tavares over the summer, accusing the chief executive of "reckless short-term decision-making" that has had "devastating, yet entirely predictable, consequences in the US market."
UAW President Shawn Fain released a statement this week calling Tavares's exit a "major step in the right direction."
"For weeks, thousands of UAW members at Stellantis have been calling for the company to fire Carlos Tavares due to his reckless mismanagement of the company," Fain said in the statement. "We are pleased to see the company responding to pressure and correcting course."
Fain also said that the union is still committed to holding Stellantis accountable amid planned layoffs the union says violate the 2023 collective bargaining agreement.
"We are looking forward to sitting down with the new CEO, backed up by thousands of UAW Stellantis members ready to take action, and discussing their plan to keep making world-class vehicles here in the United States," Fain said.
