Christian Streiff, who left Airbus after proposing a major plan to save the company, is favored to become the next CEO of PSA Peugeot, the second largest automaker in Europe after VW. Peugeot is highly respected for the quality of its engineering, though American consumers are generally unfamiliar with its products since they are not marketed in North America. I have driven them and ridden in them in Europe, and found them more than satisfactory. Their small Diesel engines are considered excellent.

Peugeot has also been the nemesis of state—controlled French automaker Renault, often outshining it in terms of quality and financial performance. Its roots go back to 19th century bicycle manufacturing, and it was an early pioneer of autos. It absorbed the other privately—owned French carmaker Citroen when it fell on hard times.

After a number of years of excellent performance, however, Peugeot has fallen on comparatively hard times, with few new models in its lineup, and vicious price competition in the European market, something affecting all automakers except BMW, whose premium—priced products aree still in high demand, especially in the rich overseas markets of Japan and the US.

Interestingly enough, it appears that Streiff was actually talking to Peugeot even as he was proposing his turnaround plan for Airbus. Perhaps he sensed a need for a fallback career, expecting to be forced out. Or perhaps he never expected to stay for the longer term.

At Peugeot, he is expected to devise a similarly broad plan to cut costs and position the company for survival operating in a high cost markets, but facing global competition. At least this time around he may not face the intervention of the governments of Germany and France.

Hat tip: Joe Crowley

Thomas Lifson   10 20 06