قالب وردپرس درنا توس
Home / Business / Peugeot's bold CEO for steering wheel with Fiat Chrysler

Peugeot's bold CEO for steering wheel with Fiat Chrysler



Paris-

Carlos Tavares

crippled the auto world as he apparently left the heir position

Carlos Ghosn

at the worldwide alliance Renault-Nissan six years ago and then took the reins of the rival rival Peugeot, which sold relatively few cars outside Europe.

Now the 61-year-old chief executive of Peugeot's owner, PSA Group of France, is returning to a wider stage. Mr. Tavares negotiated a $ 50 billion merger with

Fiat Chrysler Automobiles

NV, which, if completed, will mark one of the largest car industry deals in decades and leave him CEO of the combined company.

The agreement presents Mr. Tavare's new challenges. He largely saved Peugeot by cutting costs and focusing on the bottom line, and he has identified the virtues of staying smart rather than chasing scale in a rapidly changing industry.

"We are not drug addicts," Tavares said. in a March interview with The Wall Street Journal. "We think agility is very important."

Nevertheless, the proposed merger would create one of the world's largest car companies, a car-producing behemoth with a large North American presence and almost a quarter of the European market.

Peugeot bleed money when it recruited Mr. Tavares in 201

3. Under his leadership, PSA has gone from losing $ 5 billion (about $ 5.6 billion) in 2012 to last year's net profit of $ 3.3 billion euro, with a margin of 8.4% in core business, making it one of the most profitable car market manufacturers in the industry.

He achieved the turnaround largely by squinting production and proclaiming the dangers of expanding too fast or chasing sales with discounts. He also trimmed the workforce without closing factories, negotiated an agreement with unions to cut the standard work week for some employees and eliminate jobs through outsourcing.

"One of the challenges for us is to live near death," says Mr. Said Tavares in a 2017 interview with the magazine. "It teaches you what you really need to do."

But he also saw that scale was important to survive as the global auto industry enters its next downturn, according to people familiar with his views.

PSA was at risk because of its dependence on Europe's weak market. In 2018, PSA sold 3.95 million vehicles, compared to 10.85 million for

Volkswagen AG

and 10.4 million for

Toyota Motor Corp

Almost 80% of PSA's sales were in Europe.

For several months, PSA and Fiat Chrysler have been holding on, talking about merging, according to people familiar with the discussions. The talks were briefly interrupted in May by Fiat Chrysler's failed attempt to team up with Renault, but resumed again over the summer.

In recent weeks, Mr. Tavares approached Fiat Chrysler with a plan to merge the automakers – a goal as long as both Ghosn and Fiat Chrysler's former CEO avoided,

Sergio Marchionne,

who died in 2018.

While these chiefs were famous workaholics – who sprang around the world to make factory visits – Mr. Tavares is a strict practitioner of work-life balance. His work day usually runs from 8am to 6:30 pm, and he calls on the drive home before taking the evening off.

He spends many of his weekends on the track, racing cars and competing in events such as the 24-hour Le Mans Classic. Last year, he ended this race by spinning off the track of the Lola T70, a classic British racing car, before colliding with another car.

"I am a supporter of a life where you are not bored to death," he told motorsport publication Endurance-Info afterwards.

Mr. Tavares studied engineering in Paris before joining Renault in 1981 as a test-driving engineer.

He climbed quickly through the ranks. After a stint in the car development unit to

Renault SA

alliance,

Nissan Motor Co.

, Mr. Tavares took charge of the Japanese automaker's operations in North and South America. There, he increased US market share by a full percentage point to 8.2% at the height of the recession that followed the financial crisis of 2008. It positioned him to return to France as Mr. Ghosn's No. 2.

But Mr. Tavares busted in Mr. Ghosn's shadow, telling Bloomberg News in 2013 that his boss was "here to stay" and considered running

General motors

Co.

"Why not GM?" He said. "I would be honored to lead a company like GM."

SHARE YOUR TAKES

What should Tavare's priorities be after the merger? Join the conversation below.

Months after leaving Renault, Mr. Tavares took over at Renault's rival in France: Peugeot. At PSA, Mr. Tavares took a page out of Mr. Ghosn's playbook by cutting costs and maintaining a sharp focus on important metrics. Mr. Tavares himself was known for flying on budget airlines instead of the private jets used by many car tits.

PSA quickly returned to profitability, and Mr. Tavares got to work on making the company bigger.

In 2017, Mr Tavares increased PSA's share of the European market with the acquisition of Opel and Vauxhall from General Motors, which sold after years of losses.

A review of Opel's costs compared to PSA was revealing: At some of Opel's German manufacturing plant cost costs were around twice that of PSA's French plants. This sparked a strong reaction among Opel employees who felt challenged to do better, Mr. Tavares said in an interview at the time.

"First they got scared and then they got excited," he said.

In addition to Tavares, plans to shift production to the French carmaker's technology accelerated, allowing the larger car group to save money by building Peugeot, Citroën, Opel and Vauxhall models with the same equipment and parts. 19659004] Last year, Opel reported an operating margin of 4.7%, marking the first profitable year since 1999.

Robert Peugeot, who heads the Peugeot family's investment company, recently said, "I was completely wrong to see how fast the recovery was was achieved. ”

Write to Nick Kostov at Nick.Kostov@wsj.com

Copyright © 2019 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8


Source link