Carlos Tavares’ sudden elevation to the top PSA Peugeot Citroen position comes at time when the “dirtiest work” at the French automaker is almost complete, says one automotive analyst.
PSA made its dramatic announcement yesterday (25 November) that Tavares – formerly Renault COO – would become CEO from 1 January with current chief Philippe Varin requesting the appointment be made quickly.
“I would say at least half of the work is done and probably the dirtiest work – the closure of a plant [Aulnay] and implementation of lay-offs is more or less done,” Metzler Bank automotive analyst, Juergen Pieper, told just-auto from Germany.
“Still, it is very difficult, but the hardest decisions have been made already. He [Tavares] is probably lucky the UK market is recovering and new products are coming out, including the 308 and so he is, in a way, at the right time.”
PSA – under the tutelage of Varin who recently signed an extension to his contract at the recent shareholders’ meeting – has engaged on a series of drastic pruning measures including shuttering the Aulnay plant near Paris and unveiling redundancies of up to 8,000 staff to address challenging European conditions.
“He [Varin] recently got a new contract and obviously wanted a new contract,” said Pieper. “He was very much under fire and what we all don’t know, how the family treated him in the past years.
“It was probably no fun and the negotiations with the unions were definitely no fun. He is probably going to be paid his contract for another three or four years. To me, it looks like he will retire.
“If the restructuring succeeds, he will probably have played a major role in that.”
The Metzler Bank analyst added despite PSA’s woes, he had been “bullish” for some time as to the automaker’s prospects, that could see both it and the French market grow by around 5%, with Tavares able to preside over the uptick.
“He [Tavares] might be the hero in two years when PSA is profitable,” said Pieper. “I am probably a bit of an exception – I am bullish for PSA for a year or so because this in the end…is a very classical turnaround story.”
Tavares will join PSA’s managing board from 1 January, 2014, until his appointment as president next year, with Varin asking his successor be appointed ‘rapidly,’ although the automaker did not disclose what the future held for its incumbent CEO.