June 20, 2012 / 3:33 PM / 6 years ago

Peugeot family wants CEO to go: report

The Peugeot logo is displayed during the second media day of the 80th Geneva Car Show at the Palexpo in Geneva March 3, 2010. REUTERS/Denis Balibouse

PARIS (Reuters) - PSA Peugeot Citroen’s (PEUP.PA) biggest shareholder, the Peugeot family, wants Chief Executive Philippe Varin and his management team replaced because of a fall in sales and dissatisfaction over its alliance with General Motors (GM.N), French newspaper La Tribune said on Wednesday.

Peugeot declined to comment on the report, which boosted its shares by nearly 7 percent, making it the top gainer on the CAC-40 of French blue chips .FCHI.

General Motors is currently PSA’s second-largest shareholder with a 7 percent stake, while the Peugeot family holds 25.2 percent of the company’s capital and 37.9 percent of its voting rights through the Societe Fonciere Financiere et de Participation (FFP) holding.

Both automakers are struggling in Europe, where demand has drastically declined during the region’s debt crisis. By combining efforts around purchasing and logistics, and eventually building cars on shared vehicle platforms starting in 2016, they hope together to drive down costs.

Analysts believed that Varin, who took over as chief executive in 2009 with the aim of expanding PSA’s international presence and moving its Peugeot and Citroen brands upmarket, wants the alliance to deepen.

A spokesman for General Motors said: “We’re busy putting in place the foundation for a long-term alliance that will help both companies achieve real synergies.”

“We see terrific potential in purchasing and logistics and we’re pleased with the progress the teams are making.”

PSA shares, which have lost around 24 percent of their value since the start of 2012, were trading 6.6 percent higher at 1108 EDT, outperforming the French blue-chip CAC 40 .FCHI index, which was up 0.14 percent.

Reporting by Elena Berton and Gilles Guillaume; additional reporting by Bernie Woodall in Detroit, Editing by Elaine Hardcastle

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