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A car CEO Much of Detroit doesn’t know he’s taking on a new empire

(Bloomberg) – The recently completed merger of Fiat Chrysler Automobiles NV and PSA Group is set to raise the global profile of an under-the-radar executive chairman who will lead a huge and extremely complex automaker with calm intensity. The market debut This week, Stellantis, the group of Italian-American and French automakers, will act as the coming-out party for its leader Carlos Tavares. He’s spent a 40-year career climbing the ladder of an industry where the modern celebrity CEO was born. He has carried out impressive turnarounds, largely leaving commercial flights to and from Detroit largely undetected. The wiry, hyperactive 62-year-old has shown little desire to be another Lee Iacocca, Dieter Zetsche, Sergio Marchionne or Carlos Ghosn. But whether he steps into the spotlight or not, he’ll get a lot more of it to lead an empire of around 400,000 employees and 14 brands into an uncertain future where cars are increasingly powered by batteries and software, and the internal combustion engine is in decline “He doesn’t sell Carlos and he doesn’t want to,” said Jim Press, an auto manager who worked with Tavares when he led Nissan Motor Co.’s North American operations. “He develops people and organizations. The guy’s a great businessman. “Mega-mergers in the automotive sector failed in simpler times. Prior to Daimler’s catastrophic combination with Chrysler at the turn of the century, PSA’s arch-rival Renault acquired American Motors in a doomed deal that the French company rolled back a little over a decade later. In order for Tavares to be successful with Stellantis, he has to do more than just streamline and cut costs, the game book he followed to bring PSA back from the sidelines. The self-described “performance psychopath” has to prove his product cuts and catch up on electrification at a time when little seems to matter to investors. Tavares, who was born and raised in Lisbon, showed his early passion as a 14-year-old volunteer on the Estoril circuit. Since then, he has competed in more than 500 races as an amateur driver and said he became an engineer because he lacked the talent and money to drive professionally. He was slated to drive a Lancia Stratos at an annual rally in Monaco this month before Covid-19 forced his cancellation. After graduating from one of the best engineering schools in France, Tavares began his career at Renault in 1981. He ran partner Nissan North America for two years before becoming Ghosn’s number 2 at Renault in 2011. In an unusual power play for a top job, he told Bloomberg News in 2013 that since Ghosn intended to stay here, he would be interested in running General Motors Co or Ford Motor Co. He left Renault within a few weeks and took over the helm of the nearly bankrupt PSA six months later. The French state and the Chinese Dongfeng Motor Group rescued PSA by participating in a share sale and a € 3 billion capital increase. Tavares cut the model range, cut costs and increased vehicle prices. PSA made its first annual profit in three years. He used similar tactics at Opel and Vauxhall, the brands GM dropped to PSA in 2017 after suffering roughly $ 20 billion in losses over two decades. By cutting development spending and buying up thousands of workers, he was quickly in the black. “The Tavares factor was probably the most underestimated” of PSA’s 2014 turnaround plan, said Stephen Reitman, auto analyst at Societe Generale. “Opel Vauxhall was seen as perhaps a step too far, but it proved that by patiently walking around and thinking with people, they would rethink positions that had contributed to 20 years of loss.” Five-Slide RuleBloomberg News spoke to half a dozen people who have worked closely with Tavares. They describe it as extremely competitive with great attention to detail. He does not tolerate meetings that start late or that drag on, and asks subordinates to give presentations on five slides or less. Avares avoids the annual business elite gathering Ghosn attended in Davos, Switzerland, and shows off dad shoes in worn auto shows. He often spends weekends tinkering with cars in his Paris suburb. As head of Stellantis, he will answer the dynastic shareholders – the Agnellis, led by Chairman John Elkann, as well as the Peugeots – and politics will play an overwhelming role. The French state will continue to have a stake in the merged company, and Italy’s deputy economy minister has indicated that his government may also acquire a stake. PSA outgoing chairman Louis Gallois said Tavares’ roots are in Portugal, where he owns a vineyard and a small classic car business, he will be an effective neutral umpire. Stellantis will be an amalgamation of model lines with a strong presence in the lucrative truck and SUV segments of North America thanks to the Ram and Jeep divisions of Fiat Chrysler. PSA’s revived Peugeot and Citroen brands have also stood out in Europe and are the envy of Renault. Still, Stellantis is unlikely to gain a foothold in the luxury car business. The Alfa Romeo and Maserati lines are struggling and PSA’s DS is tiny. Fiat Chrysler and PSA also stumbled on the huge Chinese auto market: “Tavares knows that Europe is currently the biggest challenge for Stellantis if the Chinese market is a medium or long-term goal,” said Carlo Alberto Carnevale Maffe, professor at Bocconi University in Milan. “He must act by cutting costs, restoring profitability and investing in a range of technologies.” For more articles like this, visit bloomberg.com. Subscribe to us now to stay up to date with the most trusted business news source. © 2021 Bloomberg LP

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