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It's important HR develops strategies for keeping staff and board 'on message' when restructuring, says PSA Peugeot Citroen HRD


In 1897 the first car built in Britain appeared in Coventry. More than a century later, with manufacturing in decline, the city is still the beating, if not quite racing, heart of the UK motor industry. For leading automotive companies, it’s simply not worth having a British base anywhere else.

That's the story for French multinational PSA Peugeot Citroen. As its HR director for northern Europe, David Connell, says: "The Coventry area was always a Peugeot heartland."

While PSA used to have a manufacturing plant in Coventry, it closed in 2007 and the company no longer makes cars in the UK. But it is still a powerful presence. In 2012 the business, which used to have two separate headquarters for Peugeot and Citroën, decided to consolidate all commercial activities in the Coventry offices (Citroën had been based in Slough). This came alongside a major restructuring. As a result, although there are still two public-facing brands, people working in the company feel part of one organisation.

"We present two brands to our customers, but when we talk to our people, they need to understand they are part of a group," says Connell. "The group doesn't have an identity to the general public. For our commercial strategy, it's important our customers see our two products as different. We don't want to weaken the brands, but we need to optimise as much as possible where there is shared activity."

This activity, such as HR, finance and distribution - everything that is not brand- specific - has now been pulled into one shared division, overseen by Connell. In his 16 years at PSA he has worked in functions ranging from engineering to warehousing and IT as well as HR. "I've got a lot on my plate and a lot to learn," he says. "I can take my experience in HR and focus on the people issues for the business. It's not just about hard, business indicators, but how we can use people to achieve our objectives, and make sure they feel as motivated and engaged as possible."

The restructuring has come with challenges, not least the moving of Citroën staff from Slough to Coventry, which required sensitive handling. "Any time you close a site, even if you are just relocating the activity, there's a sense of loss, even bereavement," says Connell. Alongside the relocation, the restructure meant making 100 redundancies at both Citroën and Peugeot. "It's never a happy time, but it did provide us with an opportunity to move some people around and freshen things up a bit."

Connell adds: "It's amazing how important geography can be. Bringing everyone into one location and reorganising the departments so there's one clear organisation creates opportunity for synergies. A number of people sit in the middle, providing support to both brands, so there is a need for a unifying message for the UK organisation. It's not about diluting the group, but having a shared vision about what it is to be part of it."

The UK automotive industry has suffered heavily over the past few decades from competition from low-cost countries. PSA also faces the further issue of being over-reliant on stagnant European markets, something it is trying to combat with a big push on globalisation.

"We are heavily dependent on the European market, and Europe is struggling," Connell admits. "But the UK is one of the lights of hope: the market is growing and we are growing our market share. That creates a great energy for employees and a great drive to move things forward after all the changes. We need to make sure employees recognise the strategy is good, we are making progress, and the euro crisis is bigger than this organisation.

"The challenge is how to remain competitive with organisations coming in from the Far East and newcomers who are particularly aggressive in their pricing. We need to do more with less, do it better, and make sure our customers are satisfied, our brands are strong and our people have a sense of belonging."

To drive this, Connell's HR strategy focuses on development, reward, involvement, values and engagement (appropriately forming the acronym DRIVE). This has led to a focus on engagement and communication. Throughout the restructure, Connell held 'World Cafe' events for employees and managers, aiming to "let out some of the emotion and think about the future". He explains: "For us as a management team, it was useful to hear it straight from the horse's mouth. Now we meet weekly to discuss the actions from what we learned, to demonstrate that we've listened and acted - or if not, why not?"

PSA is used to taking a long-term view. "We know where we need to get to, but know we won't get there in one step," says Connell. "We need to be more agile to compete with organisations with different structures and histories, but not lose what makes us who we are."

Much of the organisation's identity comes down to the city that has so much automotive history. Connell is a Coventry cheerleader (he is a champion of the Coventry and Warwickshire Local Enterprise Partnership). "Coventry is a great place to do business and has so much potential," he says. "It's been through some very tough times, from the war to losing industry, but it's like the phoenix rising from the ashes." You could say the same thing about PSA.