Peugeot Board Supports CEO After Reports of Family Disapproval
PSA Peugeot Citroen (UG)’s supervisory board said it supports Chief Executive Officer Philippe Varin and his strategy, following a report in La Tribune that the Peugeot family was unhappy with his management.
“Following rumors that have appeared today in the press the entire Supervisory Board of PSA Peugeot Citroen wishes to express its complete support for Philippe Varin and the Managing Board and also for the current strategy that is in place,” the board said today in an emailed statement released after market closing.
The Peugeot family is disappointed with Varin’s results and some members question his decision to ally with General Motors Co. (GM), La Tribune reported online today, citing unidentified persons. Varin is on an ‘ejector seat,’ the newspaper said.
Peugeot, Europe’s second-biggest carmaker, announced plans in February to sell assets, including a stake in its trucking unit Gefco, as it struggles with rising debt and falling sales. The company now plans to sell at least 50 percent of Gefco, a union representative said on June 15. The carmaker set up a strategic alliance with GM in March in which the U.S. automaker became Peugeot’s second-largest shareholder after the founding family.
“The Peugeot family members have seen their shares losing more than 50 percent of their value, so of course they’re unhappy,” said Horst Schneider, an analyst at HSBC Trinkaus & Burkhardt AG with an “underweight” rating on the shares.
Shares of Peugeot closed 6.5 percent higher in Paris at 8.21 euros, valuing the carmaker at 2.9 billion euros ($3.69 billion). The French company hit a 23-year low last week, when its stock fell to 7.34 euros on June 14.
The Paris-based automaker’s stock has slumped 68 percent in the last 12 months. Peugeot’s five-month sales in Europe are down 15 percent, outpacing a 7.3 percent industry-wide drop, according to data from the European Automobile Manufacturers’Association. The Peugeot family owns 25.3 percent of the company.