The fourth largest auto manufacturer in the global market, Stellantis, announced on Sunday that its CEO, Carlos Tavares, will resign due to increasing "differences in opinion" between management and the board of directors.

The company stated that its board of directors accepted Tavares' resignation on Sunday. His departure is effective immediately.

Stellantis, formed by the merger of Fiat Chrysler and Peugeot Citroën, stated that the process of appointing a new CEO is "proceeding smoothly" and is expected to be completed in the first half of next year. Prior to that, the company will establish a new temporary executive committee led by chairman John Elkann.

"Since its establishment, Stellantis' success has been rooted in perfect coordination among shareholders, the board of directors, and the CEO. However, differing opinions have emerged in recent weeks, leading the board of directors and the CEO to make today's decision," said Stellantis senior independent director Henri de Castries in a press release.

A spokesperson for Stellantis declined to disclose any further information regarding Tavares' resignation.

Less than two months before Tavares' resignation, the company announced that he would retire at the end of his contract in early 2026, at which time the company stated that it planned to name a replacement before the fourth quarter of next year.

Since Stellantis was established in 2021, Tavares has led the company. The veteran of the auto industry has been widely praised in recent years for leading this merger and making Stellantis one of the most profitable auto manufacturers in the world.

However, this year, the company's financial performance was significantly below expectations due to mismanagement of its primary cash source in the usa market, a lack of investment in new or updated products, historically high prices, and extreme cost-cutting measures.

The company also owns brands such as Dodge, Fiat, Chrysler, and Peugeot. In September, the company lowered its annual performance guidance, and a month later, it reported a 27% decline in net revenue for the third quarter.

So far this year, Stellantis's stock price has fallen by about 43%.

Tavares has made cost reduction an important task for Stellantis, with measures including reshaping the company's supply chain and operation, reducing the number of employees in the usa, and increasing work in low-cost countries like Brazil and Mexico.

Several Stellantis executives have previously complained that these cost-cutting measures have gone too far and caused problems in the usa. Due to potential repercussions, these executives requested anonymity.

Tavares disputed the claim that the company's large-scale cost-cutting efforts have caused problems.

"When you don't deliver for any reason... you might want to find a scapegoat. Cutting the budget is easy. That's wrong," Tavares said in July.

Public documents show that from December 2019 to the end of 2023, Stellantis's workforce has decreased by 15.5%, about 0.0475 million employees. This year, the company has further laid off workers in the usa and Italy, affecting thousands of factory workers, which has angered unions in both countries.

The United Auto Workers (UAW) has been calling for the dismissal of Tavares for several months as its members face layoffs and production cuts. Stellantis's network of dealers in the USA has also publicly opposed Tavares due to the company's excessive inventory and lack of financial support for selling autos.