The near-final merger of Fiat Chrysler Automobiles NV and PSA Group is poised to build the global image of a sub-radar leader that will lead a large complex car maker with a silent intensity.
This week’s first market of Stellantis, the group created by Italian-American and French automaker manufacturers, will act as an outbound party for their leader, Carlos Tavares. He has spent a 40-year career rising up a business ladder that impressed today’s distinguished CEO, engineering strenuous efforts while largely unrecognized taking commercial trips to in and out of Detroit.
The wiry, hyperactive 62-year-old has shown little desire to be another Lee Iacocca, Dieter Zetsche, Sergio Marchionne or Carlos Ghosn. But whether it gets around the spotlight or not, it will find much more leading an empire of about 400,000 employees and 14 brands to an uncertain future, where cars will continue to grow off batteries and software and the combustion engine disappears. .
“He doesn’t sell Carlos, and he doesn’t want to,” said Jim Press, an automotive executive that worked with Tavares when the latter was in charge of Nissan Motor Co.’s North American operation. “It develops people and organizations. The man is a good businessman. ”
Automated mega unions have failed in simpler times. Before Daimler’s disastrous merger with Chrysler around the turn of the century, Renault’s PSA archive found American Motors in a difficult deal that turned the French company back a little over a decade later.
For Tavares to succeed with Stellantis, it needs to do more than just tidy and slash costs, the playbook he followed in bringing PSA back from the brink. The self-defined “performance psychopath” also needs to test his product chops and get caught up in electrification at a time when investors don’t seem to care much more.
The roots of racing
Born and raised in Lisbon, Tavares demonstrated his early passion as a 14-year volunteer at the Estoril route. Since then he has competed in over 500 races as an amateur driver and is said to have been an engineer as he did not have the talent and money to race professionally. He had planned to drive Lancia Stratos at an annual gathering in Monaco this month before being stopped by Covid-19.
After graduating from one of France’s leading engineering schools, Tavares began his career at Renault in 1981. He was head of Nissan’s partner operations in North America for two years before becoming Renault’s No. 2 to Gosn in 2011.
In a rare power play for a major work, he told Bloomberg News in 2013 that, since Ghosn planned to hold around, he would be interested in running General Motors Co. or Ford Motor Co. He left Renault within weeks and led the almost broken PSA in six months later.
Carlos Tavares, chief executive of PSA Group.
The French state and China’s Dongfeng Motor Group issued PSAs by participating in 3 billion-euro share sales and capital gains. Tavares affected the model line, cut costs and raised vehicle prices. PSA turned their first annual profit in three years.
He implemented devices like Opel and Vauxhall, the GM brands that were outsourced to PSA in 2017 after losing about $ 20 billion in losses over two decades. By cutting down on development and buying thousands of employees, he quickly put those jobs into the black.
“The Tavares factor is perhaps the most unpredictable thing” of the 2014 PSA reversal plan, said Societe Generale automation analyst Stephen Reitman. “Opel Vauxhall saw it as perhaps a step too far, but he proved that by going around and reasoning with people, they would reconsider careers that had contributed to 20 years of loss.”
Five-slide rule
Bloomberg News spoke with half a dozen people who have worked closely with Tavares. They say it was ultra-competitive with meticulous attention. He does not accept meetings starting late or slowing down and asks subscriptions to make presentations in five slides or less.
Tavares shakes up an annual gathering of business elite used by Ghosn in Davos, Switzerland, and shows up to shiny car displays in his father’s shoes scratched. He often spends weekends tinkering on cars at his suburban house in Paris.
As head of Stellantis, he will answer dynastic shareholders – the Agnellis, led by Chairman John Elkann, as well as the Peugeots – and politics will play a bigger role. The French state will remain part of the united company, and the deputy minister of the Italian economy has blocked their government from acquiring property as well.
PSA Outdoor Chairman Louis Gallois has said that since Tavares has its roots in Portugal, where it has a vineyard and a small vintage car business, it will be an effective neutral arbitrator.
Stellantis will be an amalgam of model lines with a strong presence in North American forklift truck and SUV sectors, thanks to Fiat Chrysler’s Ram and Jeep divisions. The PSA-revived Peugeot and Citroen brands have also excelled in Europe and are jealous of Renault.
But Stellantis will have little base in the luxury car industry. The Alfa Romeo and Maserati lines are struggling and the DS PSA is tiny. Fiat Chrysler and PSA have also fallen in the huge Chinese car market.
“Tavares knows that if the Chinese market is a medium- or long-term goal, Europe is currently Stellantis’ strongest challenge,” said Carlo Alberto Carnevale Maffe, a professor at Bocconi University in Milan. “It has to work by cutting costs, getting returns and investing in a range of technologies. ”