PSA CEO Streiff falls victim to auto slump and French automaker's mounting losses.
France’s leading automaker, PSA Peugeot-Citroen, announced it had ousted CEO Christian Streiff, following an emergency meeting of its board of directors, Sunday, citing the industry’s “exceptional difficulties” for forcing the change in top management.
PSA will turn to Roland Vardanega, a member of its three-man board, to manage things until June 11, when the company will bring in a new, outside CEO. The new Chief Executive is the 56-year-old Philippe Varin, who previously led turnarounds in the steel and aluminum industries.
The shake-up at France’s largest automotive manufacturer came the same day the White House requested – and got – the resignation of General Motors CEO Rick Wagoner, as part of the American maker’s bid for billions of dollars in new federal loans.
The devastating automotive slump, which began in the U.S., has spread worldwide. Last month, Peugeot-Citroen reported a $433 million loss for 2008, compared with a nearly $1 billion profit, the year before. The French carmaker is expecting another large loss for 2009.
Streiff’s ouster – after just two years on the job – seemed increasingly likely, in recent days, though there had been questions about who would replace him. Initial response to the choice of Varin appears positive, Deutsche Bank analyst Gaeten Toulemonde noting the executive’s “strong reputation.”
In a written analysis of Peugeot-Citroen’s plight, analyst Tolemonde said the new CEO will have several key challenges. Among them, it will need to “prepare eventually for an Alliance with a competitor.”