• Stellantis CEO Carlos Tavares's resignation comes after months of pressure.
• The global auto giant is in turmoil amid poor financial performance in 2024.
• Tavares leaves the company locked in legal battles with investors and union workers.

Carlos Tavares tendered his resignation from the top job at global automaker Stellantis over the weekend after a year of mounting pressure to turnaround falling sales and shrinking margins.

Dealers had accused him in September of mismanaging valuable brands that helped lead to the slowdown and a a slew of executive departures.

In October, Stellantis — originally formed by a 2021 mega-merger of Fiat Chrysler Automobiles and France's PSA — said Tavares would stay through the end of his contract in 2026. But by Sunday, things had clearly changed.

Tavares, a former protégé of Nissan's notorious Carlos Ghosn, is well known in the industry for his corporate frugality. His initial cost-cutting actions helped to deliver two years of profitability. But he'll leave the company in a state of disarray, particularly in the critical North American market.

Stalling sales in North America

Stellantis's US sales 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.

Critics of Tavares have argued that his cost cutting actions, particularly in the Jeep brand, created a short-term illusion of success while creating a long-term problem for demand in the critical US market.

Dealers in September accused Tavares of "reckless short-term decision-making" that has had "devastating, yet entirely predictable, consequences in the US market."

Stellantis has reversed some of the more controversial decisions, like reinstating the Jeep Cherokee and Renegade for 2026, but some dealers previously told BI that the damage is already done.

Investor lawsuits and labor disputes

Tavares also leaves Stellantis in some legal disputes, including an investor lawsuit over the company's poor financial performance. Stellantis has said the lawsuit is without merit and plans to "vigorously defend itself."

The company is also locked in a bitter labor dispute with the United Auto Workers union about manufacturing commitments at an Illinois factory where Stellantis previously built the Jeep Cherokee.

The union has said it's ready to strike and has already begun initiating authorization votes at local units.

Stellantis, in return, has filed a lawsuit accusing the union of violating its contract with the strike threats, citing language that allows for changes to plans based on market conditions.

A special committee has been formed to search for a new CEO, and that process is "well underway," Stellantis said in a Sunday statement. During the search period, Stellantis Chairman CFO John Elkann will lead an interim executive committee, the company said.