Philippe Varin swept into PSA in 2009 to prepare to prepare the French OEM for the current European economic malaise, and now his tenure is up. In a move that is surely printing as much ink in the gossip pages in Paris as the economic journals, PSA has signed former Renault COO Carlos Tavares to take over. This is just not done in Paris where niceties may be superficial, but are strong. Well it’s been done now. It may not be GM or Ford as Tavares had suggested in an August Automotive News interview, but leading a revival of near dead PSA presents a tantalizing and potentially highly rewarding challenge to the international auto veteran.
While Tavares may lack some of the product flair of his Nissan predecessor Patrick Pelata, he corralled a Nissan organization that was lacking any top-level direction below CEO Carlos Ghosn. At Nissan, he cemented the importance of U.S, product and sales discipline, and balanced Ghosn’s quest for market share with the need to maintain margin during the financial crisis. After the departure of departure of the leadership team under Jed Connolly, the US had stumbled in execution without direction in its new Tennessee headquarters.
Back at Renault Tavares took over COO duties with the departure of Pelata. Few remember that Pelata took over the COO position in 2008 as Renault suffered from any operational leadership. Tavares was able to maintain discipline and guide Renault through the shallows of the current anemic European auto market. He continued the plan to leverage the low-cost Dacia brand in tough times, and fought hard against labor demands for production inefficiencies.
In short, Tavares is a tough operational leader with discipline and focus. This is precisely what PSA needs to execute its survival strategy over he next 24 months. He has shown that he can effectively lead in emerging markets including China and Brazil. Interestingly, he is know by and knows well, the team and Dong Feng, Nissan’s prime partner in China. One has to wonder if there is any foreshadowing here. At home, he can face the unions, and understands how to leverage and balance brands.
Peugeot is a strong solid brand. Citroen is a strong brand. PSA has up to date technology and is capable of inspiring design. Varin did his part navigating the political channels to set the direction. Tavares is a great choice to take the helm from here.
Bottom line: Thank God Tavares and the family threw out the decades old agreement for Renault and Peugeot to not take talent from each other. It’s crystal clear Renault no longer wanted Tavares. The board has hitched its wagon to many more years of rule under Carlos Ghosn. They question remains of how and when PSA will restructure its balance sheet, but from an operational standpoint, this is a big score.