LONDON Jurgen Schrempp idolizes Jack Welch and Paolo Fresco used to work for him. But a couple of other chief executives have emerged as godfathers of shareholder value in the European auto business.
Jean-Martin Folz of PSA/Peugeot-Citroen and Wendelin Wiedeking of Porsche have been emulating Welch, the legendary long-time head of General Electric, more than DaimlerChrysler's Schrempp and Fresco, who was vice-chairman of GE before he joined Fiat.
Folz vowed to return more value to investors when he took over PSA/Peugeot-Citroen in October, 1997. Wiedeking promised the same as he began his well-documented turnaround of Porsche in 1993. Both have delivered on their promises, according to the Automotive News Europe/PricewaterhouseCoopers Total Shareholder Return Index.
PSA and Porsche ranked first and second for the 12-month period ending March 31, with returns of 72.2 percent and 59.2 percent respectively. Porsche was tops in the three-year period through March 31 with a return of 343.5 percent. PSA was next best at 137.5 percent.
Takeover speculation has pushed up the value of some smaller companies. Rising market share, led by the triumphant 206, has also helped. But analysts credit PSA with getting the basics right. They say Folz has successfully integrated Citroen and Peugeot in terms of product development, engineering and manufacturing and has more effectively communicated with the financial community.
Analysts also like Folz's strategy to cut investment by seeking strategic partners and reducing its core platforms to three from six by the end of 2000.
Speculation about a takeover or an alliance has periodically moved the share price. But the Peugeot family that owns 37 percent of voting rights says it will not sell.
Strong sales of the Boxster and new 911 have helped Porsche's standing with investors. But analysts also credit Wiedeking with strong, focused leadership, a de-layering of management and improved quality.
BMW's share price increased after the company announced plans last month to sell its troubled British subsidiary to Alchemy Partners, a venture capital group. It later agreed to sell Land Rover to Ford.
Buyout speculation has also supported BMW shares. But the Quandt family that controls 45.6 percent of the company says it will not sell its stake.
Renault finished third in the three-year measurement, with a return of 115.9 percent, well above the three-year automakers index of 50.5 percent.
Fiat and Volkswagen were laggards among European carmakers. Fiat SpA's shareholder return was a negative 8.4 percent in the past year and up only 14.6 percent over three years.
The share price reflected Fiat Auto's declining market share in Europe and troubles in key emerging markets.
Volkswagen declined 25 percent in the 12 months ending March 31 and was virtually unchanged over three years. DaimlerChrysler's shareholder return was down 22 percent in the past year. Fiat, Volkswagen and DaimlerChrysler all say they will try harder to woo investors.