Peugeot seeking new chief in deal with Dongfeng

PUBLISHED : Monday, 25 November, 2013, 3:52am
UPDATED : Monday, 25 November, 2013, 5:45pm

PSA Peugeot Citroen is interviewing candidates to replace chief executive Philippe Varin, after partner Dongfeng Motor said a deeper alliance under negotiation should be accompanied by management change, sources said.

Varin himself is leading the hunt for a successor who has the calibre and experience to head a global car-making alliance - qualities that Dongfeng emphasised when discussing a capital tie-up and expanded industrial co-operation, the sources said.

Varin on Saturday declined to comment on a report in Le Figaro that the troubled carmaker might hire former Renault chief operating officer Carlos Tavares as his new second-in-command.

Peugeot and Dongfeng are in talks to build on their joint venture in China with co-operation in other markets and a share issue that would see Dongfeng and the French government acquire stakes in the French firm.

Peugeot is cutting French jobs and plant capacity as it struggles to halt losses within two years. Even then it will lack the financial clout and industrial scale to compete globally on its own and Varin has acknowledged it will need new partners and fresh capital.

Varin joined Peugeot from steelmaker Corus in 2009 and has steered the company through the worst of the crisis. But his support for a deeper tie-up with 7 per cent shareholder General Motors or Dongfeng has led to bouts of tension with members of the Peugeot family, which would lose control of the company in the planned capital rise.

The firm was seeking to raise as much as €4 billion (HK$41.9 billion) in the share issue, newspaper Le Monde said last week.

Dongfeng chairman Xu Ping saw Renault's 14-year-old alliance with Nissan as a model for the deeper partnership under discussion with Peugeot, a source said.

"But they wonder whether there's an executive capable of running a Dongfeng-PSA alliance the way [Renault chief executive] Carlos Ghosn has transformed Nissan," the source said.

Tavares began his career at Renault in 1981 and moved to Nissan 23 years later as a programme director before going on to hold senior alliance roles such as chief of Nissan Americas, culminating with his stint as Ghosn's deputy at Renault. He left Renault abruptly in August.