By Nick Kostov and William Boston
Renault SA is planning to name former Volkswagen AG executive
Luca de Meo as its chief executive at an extraordinary board
meeting this week, according to people familiar with the matter, as
it seeks to move past the scandal surrounding its former leader
Carlos Ghosn and reinvigorate its alliance with Nissan.
Italian Mr. De Meo's arrival at Renault -- which is dependent on
confirmation by a board vote -- has been regarded in the industry
as inevitable after Volkswagen said earlier this month that he was
stepping down as head of its Spanish auto unit Seat. Under his
leadership, Seat returned to profitability and became one of the
German auto maker's fastest-growing brands.
The appointment comes after Renault's board ousted the previous
CEO in October, part of wave of departures of executives who were
close allies of Mr. Ghosn when he headed both Renault and
Nissan.
Tensions between Renault and Nissan have been strained since Mr.
Ghosn's arrest in Tokyo on allegations of financial misconduct,
which he denies.
Mr. De Meo's appointment was delayed by protracted negotiations
between Renault and Volkswagen over the terms of his departure, the
people said. One sticking point was over when Mr. De Meo would
start at Renault, and he won't be starting immediately, one of the
people said.
The auto executive arrives at a difficult time for Renault, with
the stock at its lowest point for more than seven years and profit
shrinking as sales in some key emerging markets are on the wane. At
the same time, Renault's relationship with Nissan has been strained
by battles over the direction of the 20-year-old alliance.
Decision making on that score has slowed since the arrest of Mr.
Ghosn, who forged the partnership. Last month Mr. Ghosn fled to
Lebanon saying he couldn't get a fair trial in Japan.
One tricky issue for Mr. De Meo in his new role will be the
future structure of the alliance. The two partners are bound by a
shareholding relationship that Nissan has long complained is
weighted in Renault's favor. Renault owns a 43.4% stake in Nissan,
while Nissan owns a 15% nonvoting stake in Renault. The two
partners tried to hammer out a new agreement in secret negotiations
last summer, but failed to find a compromise.
Jean-Dominique Senard will remain Renault's chairman, as well as
chairman of the alliance, people familiar with the matter said.
For Mr. De Meo, who was born in Milan in 1967, taking the job at
Renault is something of a homecoming. He speaks five languages,
including French.
It was at Renault that Mr. De Meo launched his career in the
auto industry, before continuing his journeyman years with a stint
at Toyota Motor Corp. He then went to work for Fiat, where he ran
the Lancia, Fiat and Alfa Romeo business units and headed Abarth
& C. SpA, Fiat's racing unit.
Mr. De Meo also served as Fiat's chief marketing officer, and
was a driving force behind Fiat's strategy to revive the Fiat 500
as a retro model that has been one of the company's best-selling
cars.
Mr. De Meo was hired by Volkswagen AG in 2009 to run sales and
marketing of the Volkswagen brand, at a time when the German car
maker was preparing to launch a new series of small cars to help in
its bid to become the world's biggest car maker by 2018. VW had
poached several executives from Fiat for their expertise in
designing and marketing small cars.
"We are very, very sad that Luca is leaving us because he played
an very important role in the group," Volkswagen CEO Herbert Diess
said during an interview with CNBC that was televised from the
Davos World Economic Forum last week.
When he joined Volkswagen, the car maker was in the throes of
its "clean diesel" campaign. In 2015, U.S. authorities disclosed
that Volkswagen had rigged diesel engines to cheat emissions tests
and charged the company with violating U.S. environmental laws and
committing fraud.
Mr. De Meo was never identified as an insider in Volkswagen's
internal investigation and hasn't been charged or named as a
suspect in any criminal investigation in connection with the
scandal.
As a salesman, Mr. De Meo has always had an eye on the young,
trend-focused consumer. He pushed Volkswagen in 2010 to become the
first auto maker to launch a branded app timed with the European
launch of the Apple iPad. When launching the New Beetle at
Volkswagen in 2011, he described the target audience of the
Beetle's revival as an "I have a Mac person".
When Volkswagen tapped him to take over at Seat in 2015, Mr. De
Meo began immediately to reshape the struggling Spanish car maker
into a sexy, youthful brand, targeting new customers outside the
Volkswagen group in southern Europe, northern Africa, and
Germany.
To capture the growing African market, and challenge rivals
Renault and Peugeot in their traditional heartlands, Mr. De Meo
oversaw the opening of Volkswagen's first factory in the
region.
He also convinced Volkswagen CEO Mr. Diess to let Seat create
its own luxury brand, the upmarket Cupra brand, aimed to challenge
the expansion of Renault and Peugeot into the premium segment.
Under Mr. De Meo's tenure, Seat became profitable for the first
time in more than a decade. Last year, the company sold 518,000
vehicles, an increase of 10.5%. It reported sales of EUR10 billion,
up 3%, and boosted pretax earnings 33% to EUR254 million.
Mr. De Meo is well-liked and respected at Volkswagen but his
prospects of being able to helm the company were remote since the
chief executive's job is unlikely to become available soon. Mr.
Diess turned 60 in October and has strong support in his job as CEO
from the company's core shareholders and labor representatives.
Mr. De Meo also faced internal competition at Volkswagen --
which has never had a non-German CEO -- from the likes of Porsche
chief Oliver Blume.
The invitation from Renault proved to be an offer that Mr. De
Meo just couldn't refuse.
Write to Nick Kostov at Nick.Kostov@wsj.com and William Boston
at william.boston@wsj.com
(END) Dow Jones Newswires
January 27, 2020 09:03 ET (14:03 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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