UPDATE 1-NEWSMAKER-Peugeot ousts Streiff, sector troubles deepen

(adds Streiff commentts)

PARIS, March 30 (Reuters) - Christian Streiff has made a career of waging and often losing corporate battles, but the outspoken executive’s exit from carmaker Peugeot may say more about a culture clash in French boardrooms than his own record.

Sunday’s sacking of the PSA Peugeot Citroen chief executive marked the third time that the 54-year-old engineer and novelist has played for high stakes and lost, after a 100-day stint as head of Airbus and a bumpy ride as no.2 at glassmaker St-Gobain.

Family-controlled PSA Peugeot Citroen PEUP.PA, hit by an unprecedented industry-wide crisis as car sales slump, fired Streiff on the same day the head of struggling U.S. automaker General Motors GM.N was forced out.

The “exceptional difficulties” faced by the auto industry warranted the change of leadership,” Chairman Thierry Peugeot said in a brief statement on Sunday.

Streiff will be replaced by 56-year-old former steel boss Philippe Varin, who worked for more than 20 years for aluminium conglomerate Pechiney, which was bought by Alcan Inc in 2003.

Varin, who is married with four children, later joined the troubled Anglo-Dutch Corus steel company in 2003, leading it back to profitability before successfully managing its merger with Tata Steel TISC.BO in 2007.

Streiff hit back, calling his ousting “incomprehensible”, and noting that the market had appreciated his achievements.

In an interview with the Les Echos newspaper, to be published on Tuesday, Streiff said he heard about his dismissal in a telephone call on Sunday. He said that he had perhaps underesitmated the internal opposition to the pace of change he was imposing and said he did not expect the Peugeot family to sell out if Varin restored the share value.

“I do not think so. It was in any case not the direction of the latest thinking. On the contrary, my mission was to ensure that the family maintained the control in a growing company.”

Industry observers believe Streiff’s candour, and his radical thinking -- which made waves at Airbus and St-Gobain -- may have been too much for a company with a 30.27 percent family shareholding, and more recently by a 3 billion euro loan from the French state.

“I’ve heard that he was keen to make some sort of strategic move, and be quite aggressive, and the family weren’t that keen,” said a London-based analyst.

With several major management changes taking place at the PSA group in recent months, observers wondered whether senior executives -- including Citroen boss Gilles Michel -- were leaving in anticipation of a merger. Paradoxically, with the arrival of Varin, analysts say M&A deals may be more likely.

The French company last month posted a 343 million euro ($453.7 million) net loss for the full year 2008, and said it would stay in the red until 2010. [ID:nLB81907]

Analysts said Streiff had faced an uphill battle.

“I think he took on a pretty tough job, in the sense that the scope for him to change things was pretty limited, given where they were in the product cycle and given the forces at play in terms of family and government,” said Nomura International’s Michael Tyndall.

Credit Suisse analyst Stuart Pearson agreed: “I think it’s longer-term structural and strategic issues that people have more questions over. It’s a subscale mass maker, overly dependent on Western Europe, probably with too many products in too many segments.” He noted that Peugeot is the best performing stock this year in its sector.

Peugeot has gained 17.5 percent so far this year, while the the DJ Stoxx auto sector index is down 14 percent in the year to date. Renault has fallen 16.5 percent, and European market leader Volkswagen VOWG.DE is down 4.9 percent.


No stranger to corporate infighting, Streiff served as number two at French construction materials group St Gobain SGOB.PA until 2005, and was tipped to take over the top spot before being pushed out after failing to please his boss.

Streiff, an amateur pilot, was brought in to turn around Airbus in 2006 at a turbulent moment in the planemaker’s history as it battled massive delays to its flagship A380 “superjumbo” programme. He was forced out after 100 days in a dispute with parent EADS over control of painful restructuring moves.

Demonstrating the tendency to speak his mind that sometimes cost him vital support, Streiff enraged German shareholders of parent company EADS EAD.PA by calling the Hamburg plant widely blamed for A380 delays the "weakest link".

His analysis of the problems which caused hold-ups with the A380, however, and his plan to solve them -- the 2 billion euro “Power8” cost-cutting plan -- were later broadly adopted.

Married to a school teacher, with three children, Streiff published a novel, Kriegspiel (War Game) in 1999 about a young German textile entrepreneur and his French associate who take on the German establishment.

Analysts have voiced concerns over Streiff’s effectiveness as CEO since he was hospitalised in May last year. Streiff returned to work in July and said he had recovered fully from what is believed to have been a stroke.

Streiff was born on September 21, 1954, at Sarrebourg, close to Germany, and educated at the French Mines School, an elite academy for engineers. ($1=.7560 Euro) (Additional reporting by Tim Hepher, Blaise Robinson and Estelle Shirbon; Editing by Marcel Michelson and Simon Jessop)