Carlos Tavares is a man who is used to taking chances, whether he is sitting at his desk or behind the wheel of a racing car.
The 61-year-old CEO of the PSA Group is about to take the biggest risk of his long car career, and convinced the board of the Paris-based company to approve a merger with Italian-American Fiat Chrysler. The announcement shook the industry, and came almost five months after Fiat Chrysler saw a similar structured marriage with PSA's French archives Renault collapse at the 11th hour.
Those who know Tavares well, however, say that they are not surprised by the move. Even before joining as CEO in late 2013, the Portuguese-born manager was determined to lead one of the automotive industry's largest companies. He even openly expressed his interest in taking the helm of either Ford or General Motors while working at Renault. Now Tavares is putting together what will become the world's fourth largest car manufacturer, valued at around $ 50 billion.
"Like most successful CEOs, Carlos Tavares is not afraid to take risk-intelligent risks," said David Cole, chairman of the Emeritus Board of the Center for Car Research. But unlike traditional imagery that tends to be slow and cautious when moving on an opportunity, Tavares "operates more like a Silicon Valley entrepreneur," quickly and aggressively, Cole added, noting that this approach has paid off.
When it was announced that Tavares would join the PSA in 201[ads1]3, the smallest of France's two car manufacturers was bound for bankruptcy until it received a bail from the French government – which now owns 12.2% of the company through BPI France – and Chinese car manufacturer Dongfeng. PSA lost around EUR 5 billion in the year before it took over the company, or about $ 6.6 billion at the exchange rate in 2012. Last year it reported a profit of 3.3 billion euros, or about 3.8 billion dollars at 31 December.
Tavares proved that it was not a fluke when he led the acquisition of General Motors & # 39; long troubled Opel and Vauxhall brands in 2017. The subsidiary had hemorrhaging cash for two decades. Barely 12 months later – and two years ahead of Tavare's original plan – Opel was back in the black.
"You hear nothing but how good he is," a senior Fiat Chrysler head told CNBC last week. It was a rumor that quickly emerged as he and his team became acquainted with Tavares through months of secret negotiations.
What really makes a difference, according to those who have seen Tavares over the years, is his breadth of understanding of a very complex business.
The CEO of the PSA "knows every aspect of the business, which is especially beneficial if your reports are trying to snow you," said John McElroy, a veteran car journalist and host of the TV show Autoline. "You can't hide anything from him."
But perhaps most importantly, McElroy added: "This is a guy who really has blood in his veins. These days, not many leaders are left like that."  Tavares can often be found on weekends on a racetrack wearing a fire retardant racing suit in the blue-red lie of the PSA race team, Peugeot Sport.
By his own count, Tavares has managed over 500 races over the decades. His increasingly demanding business career forced him to relinquish his seat as a rally driver in the 1990s. Still, he still manages to squeeze in about 20 track events a year, and has been considered a serious challenger in the European tournament series for the past few years.
As with his ability to navigate every aspect of the car industry, from finance to production, Tavares easily jumps from one car to another, a racing series to another. He has earned a respectable reputation in not only the rally and endurances series, but also while piloting a range of classic cars, such as his own Lola T70 from 1969, an Alpine from 1976 and a Porsche 912 from 1966.
Despite for his strong record, Tavares is quick to downplay his skills on the field, telling Automotive News in a 2017 interview, "You quickly discover that the limit is the driver, not the car,"
Each race requires a serious driver to put life on the line, so it's probably no surprise that over the years Tavares has been willing to take similar risks with his career. Nowhere was that more evident than when he dropped a bombshell during an interview with Bloomberg news service on August 14, 2013, his 55th birthday.
Tavares, who had been Nissan director since June 2005 and head of operations. from Renault since May 2011, had become increasingly frustrated in hopes of becoming CEO of the French carmaker. His then boss Carlos Ghosn, who also runs the global Renault-Nissan Alliance, made it clear he was there to stay.
But Tavares said he had "the energy and appetite for a No. 1 position." When asked what he had in mind, the executive responded that "My experience would be good for any car company," then pointed to Ford Motor and its own rival rival. "Why not GM? I would be honored to lead a company like GM."
Behind the scenes, things erupted, and during the week Tavare resigned. Few thought he would be out of work for a long time, but when he demonstrated by taking up the CEO job at PSA barely three months later.
At age 61, Tavares will soon assume the most demanding position he has ever held, at least as long as the PSA-Fiat Chrysler merger goes through. The partners expect things to break down by the end of 2020.
Ironically, support may have happened several years ago. A merger actually came up in talks with the late Sergio Marchionne, the former head of Fiat Chrysler, Tavares said in an interview earlier this year. But the PSA chief said at the time that he already had too much on the plate. He focused on several other challenges, including the return of the French automaker, after a quarter-century absence, to the US market.
In a move somewhat outlandish, he posted what he described as a "low risk approach," one that is expected to extend through the middle of the next decade.
"I don't think the merger is affecting it," said a top PSA leader, asking not to be identified by name because of the subject's sensitivity. But, he added quickly, the deal could change just about anything.
Tavares, he emphasized, "is a practical guy" who knows that in the current environment, it is becoming increasingly "difficult for companies to survive." Success will not go to those who play it safe, but to those like Tavares, who are willing to risk everything as long as they have a clear understanding of what they are facing.