EXPECT PSA TO SHOW SOME TOUGH LOVE

To take a company that has underperformed – some might say failed – for at least 15 years and make it profitable within three-and-abit years sounds remarkable. But the detractors would do well to remember what Carlos Tavares and the PSA Group have achieved before.

When Tavares took the helm at Peugeot, Citroën and DS in 2013, the firm was on its knees, selling off everything it could – from company property to the company itself – just to stay afloat. Today, its profit margins are the envy of the industry.

But within that story of huge, perhaps unparalleled, success, there is also a warning for anyone naïve enough to celebrate the intended desire not to close any factories. It’s a positive sign, for sure, but Tavares was pretty clear that it will only happen if the workforce, labour unions and suppliers bend to his will to be more competitive. That means voluntary redundancies and flexible working arrangements at best, and if the parties involved refuse to flex, then all bets are off again.

The positive news is that by stating the goal and potential achievements, Tavares has publicly stated what’s possible. But, as he pointed out at the start of a news conference in Rüsselsheim last week, creating the plan has used up just 5% of the energy required – the remaining 95% will be in enacting it, and fast, in order to save Vauxhall and Opel before it’s too late.