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Peugeot CEO ousted too

2009-03-31 06:50

Paris - Christian Streiff has made a career of waging and often losing corporate battles, but the outspoken executive's exit from carmaker Peugeot may say more about a culture clash in French boardrooms than his own record.

Sunday's sacking of the PSA Peugoet Citroen chief executive marked the third time that the 54-year-old engineer and novelist has played for high stakes and lost, after a 100-day stint as head of Airbus and a bumpy ride as number two at glassmaker St-Gobain.

Family-controlled PSA Peugeot Citroen, hit by an unprecedented industry-wide crisis as car sales slump, fired Streiff on the same day the head of struggling US automaker General Motors was forced out.

The "exceptional difficulties" faced by the auto industry warranted the change of leadership," chairman Thierry Peugeot said in a brief statement on Sunday.

Streiff will be replaced by 56-year-old former steel boss Philippe Varin, who worked for more than 20 years for aluminium conglomerate Pechiney, which was bought by Alcan Inc in 2003.

Varin, who is married with four children, later joined the troubled Anglo-Dutch Corus steel company in 2003, leading it back to profitability before successfully managing its merger with Tata Steel in 2007.

Radical thinking

Streiff hit back, calling his ousting "incomprehensible", and noting that the market had appreciated his achievements.

Industry observers believe Streiff's candour, and his radical thinking - which made waves at Airbus and St-Gobain - may have been too much for a company hamstrung by a 30.27% family shareholding, and more recently by a 3 billion euro loan from the French state.

"I've heard that he was keen to make some sort of strategic move, and be quite aggressive, and the family weren't that keen," said a London-based analyst.

With several major management changes taking place at the PSA group in recent months, observers wondered whether senior executives - including Citroen boss Gilles Michel - were leaving in anticipation of a merger. Paradoxically, with the arrival of Varin, analysts say M&A deals may be more likely.

The French company last month posted a 343 million euro ($453.7 million) net loss for the full year 2008, and said it would stay in the red until 2010.

Analysts said Streiff had faced an uphill battle.

"I think he took on a pretty tough job, in the sense that the scope for him to change things was pretty limited, given where they were in the product cycle and given the forces at play in terms of family and government," said Nomura International's Michael Tyndall.

Credit Suisse analyst Stuart Pearson agreed: "I think it's longer-term structural and strategic issues that people have more questions over. It's a subscale mass maker, overly dependent on Western Europe, probably with too many products in too many segments." He noted that Peugeot is the best performing stock this year in its sector.

Peugeot has gained 17.5% so far this year, while the the DJ Stoxx auto sector index is down 14% in the year to date. Renault has fallen 16.5%, and European market leader Volkswagen is down 4.9%.


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