PARIS - Separate branches of the Peugeot family are locked in a heated debate over whether to consider selling all or part of PSA/Peugeot-Citroen SA to another carmaker.
Sources say some members of the secretive family that controls PSA no longer oppose selling a stake in the company. That is a major break with tradition and sets the stage for a battle within the family if an attractive offer is made.
Other members of the clan, led by Pierre Peugeot, chairman of PSA's supervisory board, remain staunchly opposed to an equity link with another carmaker.
The differences have emerged as talks proceed with DaimlerChrysler over the use of a PSA small-car platform for a future four-seat Smart model, plus a swap of engines and mechanical components.
At issue is whether cooperation with DaimlerChrysler would be limited to an exchange of platforms and parts, or if it also could include DaimlerChrysler taking a stake in the French group.
'It's a very topical question right now,' said a PSA insider.
Sources say the issue has been the subject of several family meetings in recent weeks. The meetings, attended by relatives working inside the company, are held at PSA headquarters in Paris and constitute an unofficial governing body for the group.
Jean-Martin Folz, chairman of PSA's managing board, says the group is open to cooperation with other car groups - such as its new diesel engine joint venture with Ford Motor Co. - but doesn't want a broad alliance.
'Talks are under way with DaimlerChrysler about several subjects but they do not concern a capital tie-up,' said a PSA spokesman.
However, sources inside and outside PSA say a debate is raging between two sides of the family.
Roland Peugeot, 73, honorary chairman of the supervisory board, and his cousin Pierre Peugeot, 67, chairman, oppose an equity alliance with DaimlerChrysler. But Robert Peugeot, 49, PSA executive vice president in charge of innovation and quality and the oldest member of the next generation, doesn't rule it out.
Robert is backed by his father, Bertrand Peugeot, 76, vice chairman of the supervisory board.
Sources say Robert and Bertrand Peugeot are not pushing for an alliance; they simply aren't opposed to one. But that is a change from the family's long-held beliefs about maintaining control and is different from the policy still espoused by Pierre and Roland.
'It is a difference in degree, but it is an important difference,' one observer said.
In an interview with earlier this year, Pierre Peugeot said: 'In order for a company to work well, it needs to not have any problem with control of its capital. I believe in continuity because the car industry needs a long-term approach. I think the Michelin and Ford (families) have the same philosophy.
'As far as I am able to do it,' he said, 'I will make sure that a Peugeot remains chairman of the supervisory board.'
Roland was chairman of the PSA supervisory board from 1972-98, the post now held by Pierre. During the same period, Pierre was vice chairman of the management board, which is now chaired by Folz and includes Frederic Saint-Geours and Claude Satinet, executive vice presidents in charge of Peugeot and Citroen brands, respectively.
Pierre, considered the patriarch of the family, is a conservative, no-nonsense man. Sources say Roland agrees with his cousin on most issues.
But Robert Peugeot also is a powerful member of the family. He is vice chairman of La Francaise de Participations Financieres, the main family holding company. And he is the only member of the family on PSA's executive committee, the group's key eight-member decision-making body.
'Robert is not stupid,' said one source. 'He is looking around and sees that PSA is almost alone with all these big alliances going on.'
Other key members of the younger generation are Robert's brother Christian, 45, vice president in charge of marketing and advertising at Automobiles Peugeot, and Jean-Philippe Peugeot, Roland's son and an executive with Peugeot Parc Alliance, the fleet sales subsidiary.
Staff Reporter Dorothee Ostle contributed to this report