Blog: Dave LeggettPSA's challenges laid out

Dave Leggett | 13 February 2013

It's not a great day for PSA Peugeot Citroen. How can it be when you announce an EUR5bn loss? 

The headline figure though, is slightly misleading, as it is mainly made up of asset write-downs, something that companies can do in the bad times (take a big bath in one go). PSA has, naturally, put a brave face on things. Cost-cutting is ahead of targets, strategies outside of Europe are in place and bearing fruit.

And then there is the burgeoning industrial alliance with General Motors. Will it be a Renault-Nissan style success story? Will both companies be able to enjoy scale economies in purchasing and shared engineering, while retaining their independence? They ought to be able to. There is a template in place in the shape of Renault-Nissan's history. But the cultural coming together between two companies is always more of a question; theory and practice. Renault-Nissan's 'glue' has been Carlos Ghosn. Nissan was on its knees when he rode in. The managers at Nissan were grateful for survival. He gave them a lifeline, and they retained their independence. Ghosn straddled both Renault and Nissan, always reinforcing the alliance and independence for both - symbolic and non-threatening.

General Motors and PSA? An American firm and a French one. There are sure to be some challenges ahead in terms of that cultural mix and I don't see a Ghosn figure emerging, so it will be different. One thing is for sure, the massed ranks of engineers and middle-managers have to want to work together, they have to realise that it is the best future they have. It doesn't always happen (DaimlerChrysler).

This video clip includes an amusing interchange between Girsky and Varin when the latter talks about 'fighting spirit'. Hope that's not prophetic, in the negative sense...

 

FRANCE: PSA reports €5bn loss for 2012 on write-downs and Europe woes


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