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09. April 2009

Slowdown signs - European carmaker officials feel the heat

It is reported that the overnight ousting of Mr Rick Wagoner and Mr Christian Streiff as CEOs of General Motors and Peugeot Citroën respectively sent tremors through the boardrooms of Europe's battered auto industry. As per report, Mr Dieter Zetsche head of Mercedes owner Daimler and Mr Norbert Reithofer head of Quandt family controlled BMW could be next in the firing line as premium carmakers suffer disproportionately from the global collapse of sales. Mr Carl Peter Forster president of GM Europe and a former BMW director may also feel the heat as a USD 3.3 billion rescue plan for Opel, Vauxhall and Saab falters in the wake of the White House's rejection of Wagoner's restructuring program.

Mr Streiff, the victim of a boardroom coup, was not even thanked for his stint as Peugeot chief in a curt statement from Mr Thierry Peugeot chairman, who is appointing Corus boss Mr Philippe Varin in his place. Mr Streiff, the former deputy CEO of glassmaker Saint Gobain made enemies in the boardroom and lost the confidence of shareholders, including the controlling Peugeot family, with his abrasive style. He had earlier lasted just 100 days as head of Airbus as his drive to cut costs and lack of diplomatic skills alienated the key Franco German players, including both governments, at the plane maker's owner EADS.

At Daimler, Zetsche, the former head of Chrysler, is struggling to contain a plunge in Mercedes sales and profits warning amid speculation it might be forced to merge with bitter rival BMW. As industry executives admit that only two or three European auto firms may emerge from the bloodbath, BMW's Reithofer has so far retained the support of the Quandt who own 46% of the firm. But the family, which rescued a near bankrupt BMW 50 years ago, is expanding its interests elsewhere. Reithofer is also surrounded by a new, more youthful board, including sales chief Mr Ian Robertson. Forster, meanwhile, could be forced to make way for Wolfgang Reitzle, head of industrial gases group Linde and a self confessed cars man, who was himself ousted from the BMW board almost a decade ago after a fight with Forster over British firm Rover.

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