Latest / Family Business Stories with Fexingo: Succession, Legacy, and Multi-Generational Companies / How the Peugeot Family Saved Their Car Company
Transcript
- Lucas: When you hear 'Peugeot', you probably think of the little lion badge on a compact car. But the family behind it started in the 19th century making steel, then bicycles, then pepper mills — yes, actual pepper mills — before they ever built a car. Luna: I actually have a Peugeot pepper mill in my kitchen. I never connected it to the car company. Lucas: Right, and that's the thing — the Peugeot family is one of France's oldest industrial dynasties, and they almost lost the car business twice. Today I want to focus on one specific moment: 1974, when they merged with Citroën and nearly handed control to the French government. Luna: So this is a story about a family that almost lost everything, then figured out how to keep the keys. Lucas: Exactly. The Peugeot family traces back to Jean-Pierre Peugeot, who converted a grain mill into a steel foundry in 1810. His grandsons, Armand and Eugène, split the business — Armand went into cars, Eugène kept the tools and bicycles. But the family stayed united through a holding company called FFCP — Foncière Financière et de Participations. Luna: So the holding company was the glue. How much control did it give them? Lucas: By the 1970s, the family owned about 30 percent of Peugeot through FFCP — not a majority, but a controlling block because the rest of the shares were widely dispersed. But in 1974, Peugeot was doing well, and Citroën was on the brink of bankruptcy. The French government basically told Peugeot: 'You merge with Citroën and absorb their debt, or we nationalise both of you.' Luna: That's a gun to your head merger. Did the family have a choice? Lucas: Not really. The merger created PSA Peugeot Citroën, but it nearly bankrupted the family. Citroën's losses were enormous — something like one point five billion francs in today's money. The family had to inject cash just to keep the combined company afloat, and their ownership stake dropped to around 20 percent. Luna: So they went from controlling shareholder to minority shareholder in a highly leveraged company. That's a precarious position. Lucas: It got worse. In the early 1980s, PSA was losing money again, and the government was pressing for a restructuring that would have diluted the family further. But the family held on. They restructured the business, closed plants, and by the late 1980s, PSA was profitable again. The family's stake stabilised. Luna: What was it about the family that made them dig in instead of cashing out? A lot of families would have sold at that point. Lucas: Part of it was pride — the Peugeot name was on every car. But also the holding company structure gave them a mechanism to stay unified. FFCP wasn't just a financial vehicle; it was a family council. They had regular meetings, they had a family constitution, and they had a rule that shares couldn't be sold to outsiders without the family's approval. Luna: That's a classic governance move. Keep the shares inside the family, and you keep control even if your economic stake shrinks. Lucas: Exactly. And it paid off. In 2008, the global financial crisis hit PSA hard. The company lost over three billion euros in 2009. The family's holding company stepped in with a capital increase, and they brought in a new CEO, Carlos Tavares, who led a dramatic turnaround. By 2014, PSA was profitable again. Luna: Tavares is a legendary turnaround guy. But wasn't the family still in control at that point? Lucas: Yes, but with a smaller stake. By 2014, the family owned about 14 percent of PSA, but through FFCP they had double voting rights — a common mechanism in French corporate governance. That gave them about 25 percent of the voting power. So they could still appoint board members and block hostile moves. Luna: That's the key lever — voting rights disproportionate to economic ownership. It's a move we saw with the Hermès family too. Lucas: Right. The Peugeot family used it to stay relevant. And then in 2017, they made their biggest bet: buying Opel and Vauxhall from General Motors for two point two billion euros. Critics said it was a mistake — Opel had been losing money for years. But Tavares and the family believed they could turn it around. Luna: And they did, right? Within a year, Opel was profitable. Lucas: Within 12 months. That acquisition doubled PSA's market share in Europe and made it the second-largest carmaker on the continent. And it set the stage for the merger with Fiat Chrysler in 2021 to create Stellantis — now the fourth-largest automaker in the world. Luna: So where does the family sit in Stellantis? Lucas: The Peugeot family holds about 7 percent of Stellantis through FFCP, with around 12 percent voting rights. Not dominant, but still a significant block. And they have board representation. The family is now into its seventh generation — that's over 200 years of family involvement. Luna: Seven generations. That's almost unheard of. Most family businesses don't make it past the third. Lucas: That's the real lesson here. The Peugeot family survived not because they made great cars — though they did — but because they built a governance structure that separated ownership from management, kept the family unified, and allowed them to bring in outside talent like Tavares when they needed it. Luna: So it's not about the family running the company day-to-day. It's about the family being stewards of the company's long-term direction. Lucas: Exactly. They had the humility to step back. And they had the discipline to keep the holding company funded and focused. That's a model a lot of families could learn from. Luna: And speaking of keeping things going — it's worth noting that shows like this one, where we dig into stories like the Peugeot family, take a fair amount of research and time. If these conversations have moved your work forward in some small way, listener support is what keeps them ad-free and independent. Lucas: Yeah, it really does make a difference. A couple of dollars a month is genuinely what keeps these going — buy me a coffee dot com slash fexingo, if you've gotten something out of them. Luna: Right. So, back to Peugeot — one last thing: what's the biggest risk the family faces today? Lucas: The transition to electric vehicles. Stellantis is investing heavily, but it's a capital-intensive shift. The family's stake may get diluted further if there's a capital raise. But they've been through worse. If they stick to their governance playbook, they'll probably find a way to stay in the game for an eighth generation. Luna: And that's the legacy: not just surviving, but adapting. The pepper mill company that became a car giant. Lucas: And a global automaker. The Peugeot story is proof that family business isn't about keeping things the same — it's about knowing when to change and how to hold on to what matters.