Carlos Tavares to sit as CEO of PSA starting March 31

Article by Anita Panait, on February 23, 2014

Carlos Tavares will officially become the new chief executive of PSA/Peugeot Citroen on March 31 -- just days after the French carmaker, Dongfeng Motor Co. and the French government are expected to sign a EUR3-billion ($4.1 billion) capital tie-up. The tie-up was negotiated by outgoing CEO Philippe Varin. PSA said that Tavares will take over responsibility for group operations at the carmaker ahead of his CEO appointment.

Tavares was the right man of Renault-Nissan CEO Carlos Ghosn, but had a fallout with his former boss after divulging in 2013 that he wanted to run a global carmaker like General Motors or Ford Motor. Analysts have described Tavares as a "car guy" and the right man at the right time for the PSA.

Max Warburton of Bernstein Research noted in an open letter to PSA Chairman Thierry Peugeot last week that Tavares was instrumental at Renault in raising EUR2.3 billion in working capital in just three years by being able to squeeze suppliers, cut logistics chains, trim work-in-progress and press more financial load onto dealers – resulting to savings that were more than twice the cash injection PSA will get from Dongfeng.

Warburton has urged the PSA Chairman to "give Mr. Tavares carte blanche to work fast and aggressively, saying that he is a true man of industry with strong experience of what levers can be pulled – we are convinced he will find more savings than Mr. Varin."

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