Renault's new CEO de Meo starts work amid high expectations

Europe

To say that Luca de Meo starts his tenure as Renault CEO with high expectations might be an understatement.

It’s been a rough few years at Renault, which once seemed poised to lead the world’s largest automaker by volume (with alliance partners Nissan and Mitsubishi) but is now struggling just to return to profitability amid the coronavirus crisis.

De Meo, credited with revitalizing Volkswagen Group’s Seat brand, has been sidelined for nearly six months by a noncompete clause. In his absence, interim CEO Clotilde Delbos and Chairman Jean-Dominique Senard delivered a 2-billion-euro cost cutting plan, leaving an overall strategy review to de Meo, who starts officially July 1.

De Meo addressed Renault’s employees and directors for the first time on June 19, wearing a sober suit and a white pocket square and delivering a pep talk in fluid French (one of a number of languages he speaks). He predicted a “surprise turnaround.”

“I’ve enjoyed moving toward a challenge, whenever there’s been a brand to rebuild, a financial situation that needed to be put back on its feet and talented people to bring together,” he said. “This is a challenge that we will face as a team.”

Perhaps hoping to ease concerns of an outsider leading Renault, the Italian-born de Meo noted: “The Renault Group is where I got my first job after my diploma. This is the company that made it possible to fulfill my childhood dream: to work in the auto industry and to start on an international career.”

And in a diplomatic nod to the French government, which holds 15 percent of Renault and recently guaranteed an emergency 5 billion-euro ($5.5 billion) loan, he described the automaker’s “French roots” as a key asset.

“When a customer buys a Clio or a Zoe or an Alpine, they’re actually buying French know-how and French culture,” he said. “This is an ace that we have. These French roots are at the heart of our group, and they are at the heart of the pride of our colleagues as well as the desires of our customers.”

De Meo is expected to deliver a revised strategic plan by the end of this year, one that could see the group continue to pull back from ex-CEO Carlos Ghosn’s strategy of internationalization, and also cut unpromising models such as minivans from its range. But he said he was heartened by future programs.

“I have already seen some wonderful products in the current range and some fantastic projects for the future, and this makes the heart of a car enthusiast like me very happy,” de Meo said.

He said he believed that Renault employees were up to dual challenge of a restructuring while coping with the pandemic. “I’m completely aware of the difficult situation that the company finds itself in today,” he said. “We need to have everyone mobilized.”

Will de Meo join the list of automotive CEOs who have recently engineered turnarounds, including Carlos Tavares (PSA), Carlos Ghosn (Nissan), Sergio Marchionne (FCA) and Alan Mullaly (Ford)?

“I’m optimistic and confident,” he said. “I am simply asking you to grant us the time we need to show proof of this.”

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