Chief executive officer, PSA Peugeot Citroën
Born: January 11, 1947, in Strasbourg, Alsace, France.
Education: École Polytechnique and École des Mines, engineering degree, 1971.
Family: Son of Robert Folz and Marianne Bock; married Marie-Claire Picardet; children: two.
Career: French Ministry of Industry, 1972, mining engineer; French government, 1974–1975, adviser to the Minister of Commercial and Craft Industry; 1975–1976, adviser to the Minister for Quality of Life; Ministry for the Quality of Life, 1976–1977, assistant director; Office of the Secretary of State for Industry, 1977–1978, director; Rhône-Poulenc Polymères, 1978–1981, factory manager; 1981–1984, senior vice president; Jeumont-Schneider, 1984–1987, assistant general manager, later chief executive officer (CEO) and chairman of the board; Péchiney, 1987–1991, managing director; Eridania Béghin-Say, 1991–1996, managing director; PSA Peugeot Citroën, 1996, managing director of Peugeot Automobiles (Automobiles Peugeot); 1996–1997, managing director of automobile division; 1997–, chief executive officer and member of managing board.
Awards: Forbes Global Businessman of the Year, Forbes , 2001; Man of the Year, Journal de l'automobile , 2002; Manager of the Year, Challenges and A. T. Kearney, 2003.
Address: Peugeot Groupe, 75 Avenue de la Grande-Armée, 75116 Paris, France; http://www.psa.fr.
■ Jean-Martin Folz was an unlikely choice to lead PSA Peugeot Citroën. Folz was a former bureaucrat who seemed likely to be eaten alive by competition unfettered by state control, yet the Peugeot family saw something in him that led them to make him the heir to the chief executive officer Jacques Calvet. By 2000 PSA Peugeot Citroën had risen to become the second-best-selling automobile manufacturer in Europe; by
2001 it was the sixth largest in the world. The Peugeots themselves purchased more shares, giving them 37 percent of the company's stock, while Folz was regarded as one of the world's best automobile manufacturing executives.
In 1974 Folz went to work as a government bureaucrat serving upper-level French cabinet officers and made an unusually rapid climb to become director of the Office of the Secretary of State for Industry. He was noted for his relentless passion for work, arriving at work by 6:00 a.m. and writing a speech for his minister by 6:30 a.m. He was straightforward, and the French press reported that he offended ministers with his bluntness. He was pushed out of his civil service career in 1978 but found a job with Rhône-Poulenc Polymères, running a factory that he quickly reorganized to be more efficient and profitable.
Folz then accepted a position in 1984 with Jeumont-Schneider, a manufacturer of heavy equipment, and rose rapidly to become the company's leader. He was hired in 1987 by Péchiney, Europe's largest aluminum manufacturing company, as the heir to the chief executive officer Jean Gandois. Gandois quickly found himself compared unfavorably with Folz, who worked much longer hours than his boss and became more influential. Gandois subsequently forced him out of the company.
In 1991 Folz became the managing director of Eridania Béghin-Say, a French and Italian company that produced sugar and cooking oil. It was his work at Eridania Béghin-Say that caught the attention of the Peugeot family. Folz was first offered the position of managing director of the Peugeot division in 1995; he finally accepted it in February 1996, with the understanding that he would eventually succeed the flamboyant chief executive of PSA Peugeot Citroën, Jacques Calvet.
Folz kept a low profile for two years after joining PSA Peugeot Citroën, speaking softly and never drawing attention away from his boss. He visited all 14 of his company's factories and studied every automobile marketplace. Coworkers found his thinking incisive and brilliant. Folz succeeded Calvet as chief executive officer on October 1, 1997. He remained publicityshy but quickly set to work remaking the company. PSA Peugeot Citroën's factories were one-third idle in 1997, and the company had lost $380 million on a gross of $25.6 billion. Its share of the European automobile market stood at only 11.8 percent.
Folz cut costs by merging the research and development and manufacturing departments for the Peugeot and Citroën divisions. At the same time, he established separate and competitive advertising departments to define each make as a unique and desirable brand. He called this innovation his "one group, two brands" strategy. In addition, he spearheaded the development of new, stylish designs for each vehicle model manufactured by his company.
Folz began a careful expansion of PSA Peugeot Citroën in January 1998 by announcing that the company would build a new factory in Brazil. DaimlerChrysler approached PSA Peugeot Citroën about purchasing the company in 1999, but Folz spurned the offer. That year PSA Peugeot Citroën sold 2.2 million automobiles in Europe alone. By 2000 PSA Peugeot Citroën had become the sixth-largest automobile manufacturer in the world, with 5 percent of the world market and three million automobiles sold. Its share of the European market had risen to 12.1 percent. It netted $1.5 billion on a gross of $40 billion. "The key to succeeding in this car market is to rapidly produce cars as varied and attractive as possible … at a competitive cost," said Folz ( BusinessWeek , April 17, 2000). In 2000 he introduced the Citroën Xsara Picasso minivan, the Peugeot 206 convertible, and the Peugeot 607 luxury sedan, which featured a revolutionary new particulate filter that made its diesel engine less polluting and more fuel-efficient than standard gasoline engines.
Although he was modest and relaxed, Folz inspired his employees with his realistic production goals, and he oversaw the distribution of $173 million dollars in employee bonuses in 2000. In 2001 Folz planned the introduction of 26 new models over the next few years, while his company's factories ran at full capacity 24 hours a day, seven days a week, every week of the year. PSA Peugeot Citroën's share of the European market grew to 14.8 percent, and its stock had tripled in value since 1997. The Brazilian factory opened in 2001, while PSA Peugeot Citroën bought 26.9 percent of China's Dong Feng Motors, an assembly factory that began manufacturing and selling cars using PSA Peugeot Citroën's techniques.
By 2002 Folz was regarded as one of the finest automobile executives in the world. That year the Peugeot 206 became Europe's best-selling automobile. PSA Peugeot Citroën sold 3.27 million vehicles, up 4.3 percent in a year that saw a decline of 0.6 percent for the industry as a whole, and it netted $1.78 billion on a gross of $57 billion. The company had 5.7 percent of the world market and 15.5 percent of the European market. Folz negotiated an alliance with BMW to create more economical gasoline engines in the summer of 2002.
In 2003 PSA Peugeot Citroën was fourth in automobile sales in China, where it invested $120 million to expand its joint venture with Dong Feng. It spent $750 million to build a plant in Trnava, Slovakia, and invested $1.6 billion in a joint venture with Toyota Motor Corporation to build a factory in the Czech Republic. The company also invested $1 billion to upgrade its existing plants.
See also entries on Eridania Béghin-Say S.A., Péchiney S.A., PSA Peugeot Citroën S.A., and Rhône-Poulenc Polymères S.A. in International Directory of Company Histories .
Folz, Jean-Martin, "PSA Peugeot-Citroën: Europe's Second Largest Carmaker Enjoys Fastest Growth," Auto Industry, March 1, 2003, http://www.autoindustry.co.uk/features/articles/article-PSAPCE146 .
Heller, Richard, and Susan Kitchens, "Businessman of the Year: Triumph of the Understudy," Forbes.com , December 24, 2001, http://www.forbes.com/global/2001/1224/046.html .
Tierney, Christine,"Can Peugeot Go It Alone?" BusinessWeek , April 17, 2000, p. 20.
—Kirk H. Beetz