*

Company had previously said he might remain after contract

expired

*

Stellantis ( STLA ) announces other senior management changes

*

Automaker cut its 2024 profit forecast last week

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Earnings and sales in North America have been declining

(Adds details about Chinese competitors in paragraph 14, and

about UAW clash in paragraphs 19, 20)

By Nora Eckert

DETROIT, Oct 10 (Reuters) - Chrysler parent Stellantis ( STLA )

confirmed on Thursday that CEO Carlos Tavares would

retire at the end of his contract in early 2026 and announced

major senior management changes as it struggles to turn around

its lagging North American operations.

Earnings and sales in the French-Italian automaker's

traditional profit powerhouse have been declining, forcing it to

last week cut its 2024 profit forecast and signal possible

reductions to its dividend and share buybacks next year.

Analysts have downgraded the company's stock, which has

tumbled 42% this year after missteps in North America, where

sales of popular products such as its Jeep and Ram trucks

typically produce much of its profits.

The confirmation of Tavares' retirement plans comes weeks

after Stellantis ( STLA ) said it was searching for his successor, though

at the time it said it was possible he could remain after his

contract expires. The world's fourth-largest automaker by sales

said it now planned to name his successor by the fourth quarter

of 2025.

Stellantis ( STLA ) appointed Doug Ostermann, the former chief

operating officer of its China division, as its finance chief,

replacing Natalie Knight who is leaving the company.

The automaker also appointed Antonio Filosa as its North

America chief operating officer in addition to his role as Jeep

brand CEO, succeeding Carlos Zarlenga, whose future role has not

been announced.

Tavares, an avid race car driver who was widely heralded in

prior years for making Stellantis ( STLA ) one of the world's most

profitable automakers, has led the company since its creation

through a 2021 merger between Fiat-Chrysler and Peugeot maker

PSA, where he had been board chair since 2014.

But the company's bloated inventories and profit nosedive in

recent months have shocked industry observers after years of its

sizable margins being the envy of competitors in Detroit and

abroad.

"After dismissing investors' concerns on inventories and

discounts in the US for the better part of the past 12 months,

the company lost significant trust when they cut guidance in

late September," Bernstein analysts said in a note.

"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," they added.

Stellantis ( STLA ) last week lowered its forecast from positive cash

flow to negative cash flow of between 5 billion and 10 billion

euros ($5.5 billion-$10.9 billion) this year.

Tavares had previously maintained that the group's 14

brands, including Maserati, Fiat, Peugeot and Jeep were all

assets to Stellantis' ( STLA ) portfolio, but in July said poor

performers could be axed to cut costs.

He is racing against formidable competition from Chinese

electric vehicle makers that are gaining market share in Europe,

and said in order to beat these rivals, Stellantis ( STLA ) has "to try

to be Chinese ourselves."

Stellantis ( STLA ) is chasing a steep ramp-up in sales of its

electric models, aiming for 100% of its passenger car sales to

be electric in Europe by 2030 and 50% of its passenger cars and

light-duty trucks in the U.S. to be EVs by then. The company

plans to offer 75 electric models globally in that timeframe.

As the automaker attempts to sharpen its strategy and

improve its financial position, Tavares has faced harsh

criticism from the United Auto Workers union, dealers and

shareholders.

The broad management shakeup was meant to address these

concerns, he said in a statement Thursday.

"During this Darwinian period for the automotive industry,

our duty and ethical responsibility is to adapt and prepare

ourselves for the future," he added.

In addition to the management changes, Stellantis ( STLA ) is also

shaking up its structure by moving the supply chain organization

to the manufacturing division in an effort to provide more

attention to improving performance among its suppliers.

When asked for comment, a representative for the UAW sent a

link to a union website picturing Tavares in a trash can, on top

of a list of the labor group's critiques of him.

The union is laying the groundwork for a nationwide walkout

against the automaker, alleging it had failed to keep the

commitments it made in last year's contract signed after a

six-week strike that cost it about 750 million euros in profit.

($1 = 0.9146 euros)