BRUCE GAIN

PSA may be better off without Thierry Peugeot

Thierry Peugeot, pictured on the large screen, was the Peugeot family strongman but has now lost his seat on the PSA board.
Bruce Gain is an Automotive News Europe correspondent in France.
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PSA/Peugeot-Citroen’s future could be brighter following the departure of its influential former chairman Thierry Peugeot from the automaker’s supervisory board.

Thierry’s departure signals the end of dissent among Peugeot family members over the automaker’s capital tie-up with China’s Dongfeng Motor, industry watchers say.

Thierry publicly opposed the terms of Dongfeng’s purchase of a 14 percent stake in PSA.

Thierry's sister sister, Marie-Helene Roncoroni, who will replace him on the board, is expected to be less critical of PSA’s new management structure. She shares more views in common with Robert Peugeot, Thierry's cousin, who was a key driver of the Dongfeng deal, said Rabih Freiha, an analyst for Exane BNP Paribas.

Sascha Gommel, a Commerzbank analyst, said Roncoroni likely will exert less influence than Thierry, who was seen as the family strongman. "Thierry really had a strong personality," he said.

Discord among family members after the death of family patriarch Pierre Peugeot in 2002 played a large role in PSA's decline, holding back strategic decisions such as deepening ties with other automakers to enable the company to build up the scale necessary to survive in the modern industry, according to analysts that follow the automaker.

According to the French press, Thierry’s departure was precipitated by an interview he gave to the French daily newspaper Les Echos in which he criticized the current ownership structure and the strategic direction PSA has taken.  A PSA spokesman would not comment on why Thierry is stepping down.

Ultimately, Thierry’s replacement on the board and the waning influence of the family over PSA’s operations is a good thing for the company, Gommel said. "The board is more independent now from the family,” he said. "Their decisions will be based on what is good for the company instead of what is good for the Peugeot family."

However, Thierry's arguments against the terms of Dongfeng’s investment in PSA were more nuanced than what was often reported in the press, Freiha said. “PSA benefited from Thierry Peugeot’s influence,” Freiha said.

"He was opposed to giving Dongfeng a fully reserved capital increase and was pushing for a rights issue  but the final deal ended up being a comprise between the two positions. He can be credited with the final outcome of the deal,” Freiha said.

Thierry was also good for the brand and had a good focus on PSA’s long-term value but there will be less tension among board members now that he has left, he said.

PSA faces a historic turning point as observers wait to see if the capital increase by Dongfeng and the French government and CEO Carlos Tavares's Back in the Race turnaround plan bear fruit.

You can reach Bruce Gain at bgain@crain.com.

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