PSA are moving house
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Thread: PSA are moving house

  1. #1
    1000+ Posts gerry freed's Avatar
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    Default PSA are moving house

    Their Paris head office at 75 ave de la Grande Armée was sold to raise 245 million euros a couple of years ago. Now they have decide to leave it in 2017 and move to a new building in Reuil Malmaison by the RER station. That will help in their expense cutting exercise as they will only be relocating about half the present 2000 staff in Paris and using half the floor area.
    At 100,000 each per annum with on costs, a thousand staff saved releases 100 million euros a year or 20 euros per car manufactured.
    This same logic is going on everywhere in France which is why the Nov unemployment figures went up again There are now 3.48 million people out of work.

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    It's hard to contemplate 3.48 million people out of work given Australia's unemployment figures, which are bad enough
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    20 euros per car manufactured, well that's going to change the world
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    1000+ Posts gerry freed's Avatar
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    Many a mickle makes a muckle
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    Default Old wise sayings ?

    Quote Originally Posted by gerry freed View Post
    Many a mickle makes a muckle
    Well gerry
    I am sure that is a very old wise saying even though I have never heard either word.

    However my thoughts are to the incongruity of this saying in relation to a lot of overpaid CEOs who are shafting all those workers to save 20 euros a car. HMMMMnnnnn
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    1000+ Posts gerry freed's Avatar
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    The day you stop learning is the day your unemployment looms.

    see
    phrases - What is the meaning of "Many a mickle makes a muckle"? - English Language & Usage Stack Exchange

    Remember, car manufacturers are not there to provide jobs but to make cars that people buy. Competition to open the customer's wallet does not allow for carrying expenses, human, capital or otherwise that does not contribute.

    I am sure that if someone offered to do Tavares job for half his salary, the three controlling interests in PSA, two of which are government entities would leap at the chance and if he only did it half as well......................
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    Quote Originally Posted by gerry freed View Post
    The day you stop learning is the day your unemployment looms.

    see
    phrases - What is the meaning of "Many a mickle makes a muckle"? - English Language & Usage Stack Exchange

    Remember, car manufacturers are not there to provide jobs but to make cars that people buy. Competition to open the customer's wallet does not allow for carrying expenses, human, capital or otherwise that does not contribute.

    I am sure that if someone offered to do Tavares job for half his salary, the three controlling interests in PSA, two of which are government entities would leap at the chance and if he only did it half as well......................
    You might have first heard "many a mickle maks a muckle" from a delicious little Flanders and Swan song, "Misalliance" from the mid- to late-1950s. All about honeysuckles and bindweeds. Moving on....

    There are a few CEOs out there who might remember that Lee Iacocca didn't take a salary from Chrysler until he'd got it profitable.
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    1000+ Posts gerry freed's Avatar
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    In that case Tavares can now take a salary but he still has a lot of work to do to get the company cash generating and at a competitive profit margin with his bigger competitors. Both he and Iacocca never did it alone, they both depended on government financial support. which makes good sense when jobs are at stake. Iacocca never solved the fundamental problem of being a minor no 3 in market share in the US, where his two major competitors had control. Chrysler faded again and was rescued by Fiat in a search for those elusive economies of scale.
    Tavares faces the same difficulty. PSA operates with minor market shares in most locations and segments where the big four globally have control and set the benchmarks on prices, net margin and return on capital. He has said that he is keeping all options open for the time when he has PSA on a stable financial footing which is only reasonable in the uncertainties of the global economy and auto market's internal competition.
    I don't put much faith in historic precedent in these times of change but I can envisage a repeat of the Chrysler rescue. He could arrive at a position where he meets the industry benchmarks and so can still access capital but be left in a position where he is number eight in the global market and have no route to the longer term. Like Chrysler in its time of failure, PSA had no obvious industry buyer except those who would want to close it down to alleviate the excess industry capacity. Chrysler rebuilt, generated some market niches in which it could demonstrate some measure of control, such as Jeep. Tavares is trying to move PSA into a similar position with the DS marque and a move of branding towards the higher quality end of several large scale market segments. He then has the chance to find a buyer who needs that market positioning. Unlike the Chrysler days which were a US market play, when PSA is ready, the opportunies of exit will be global. It could, for example, when the Chinese demand is met provide a conduit to take Dongfeng to global presence.
    If he gets there with the risks involved and the forces opposing him, should he be paid 10 times the average employee or 10% of the capital profit made by those who put your savings at risk - that could be his billion dollar share of ten billion dollars? You can argue on "fairness" grounds but the fact remains that there are only a handful of the humans on this planet who can operate and win on this scale of poker table. The free market allows them to name their price. Deny them the right and I hope you enjoy drivng your next Trabant. Jealousy should be motivation to try to do better, not to stop others achieving.
    Last edited by gerry freed; 30th December 2014 at 03:33 AM.
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    Yes, point taken. It's an interesting analysis that I agree with. They are much to big to be a niche player and aren't competing that way (thinking Morgan for the extreme tiny niche or SAAB for a small to medium niche player). The competition at the big end is far from incompetent and provides a product that the majority of people buy happily.

    The growth of Porsche, diversification of Mercedes-Benz, arrival and growth of Hyundai all show that lots of things are possible with the right designs and marketing.

    Be interesting to watch, won't it. The Dongfeng investment is the key move this year I guess.
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    "Many a mickle" was a very common phrase in my childhood. It sounds as if from the north of England - mining country. And Newcastle would have to be the most Aussie place left.

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