Via Financial Times

When Luca de Meo was offered a job at Volkswagen, the Italian executive spoke almost no German. After studying at night, he was able to address the carmaker’s main board in their mother tongue within months of taking the post.

Such cultural dexterity will be critical when the car executive, who speaks five languages including French, moves to Renault as boss in the summer — a job requiring the deftest political touch and a sharp business acumen.

This week the Paris-based carmaker suffered the indignity for a blue-chip company of having its debt downgraded to junk status by rating agency Moody’s after it reported profits were almost wiped out last year.

Rival rating agency S&P put the company on “credit watch negative”, meaning it could also drop the group’s debt to junk from investment grade.

The downgrade highlights the challenges Mr de Meo will face when he takes charge at a company where morale is at rock bottom and relations with its largest shareholder, the French state, can complicate business decisions. Last year, Paris derailed merger talks with Italy’s FCA.

“He is taking the job from hell,” said one industry figure. The French group faces crises on multiple fronts with sales stagnating, the threat of crippling EU fines over CO2 emissions targets, and a relationship with partner Nissan that has been strained to breaking point in the wake of the arrest of former alliance chairman Carlos Ghosn.

“He is the perfect example of what we need at Renault,” said the carmaker’s chairman Jean-Dominique Senard. “We need engagement, a dynamic management style, and we need a very strong guy in marketing and vision of the brand.”

During interviews for the job, which were conducted mainly in French, Mr de Meo showed “intellectual honesty” about the challenges facing the business, and took the role despite the “personal risk”, Mr Senard added.

READ ALSO  Resetting Online Commerce | Seeking Alpha

But despite working in several roles across a notoriously difficult environment at Volkswagen, Mr de Meo has never faced a test like the one waiting for him in Paris.

Although his experience in branding and marketing is essential to fix many of Renault’s problems, he will also need to learn to wield the financial axe. Renault has launched a €2bn cost-saving programme, but the company may require deeper cuts to its bloated industrial footprint.

He also lacks an engineering background, something that was once seen as essential in a car boss. Renault argues that its new head of engineering, well-regarded former PSA executive Gilles le Borgne, will help balance Mr de Meo’s skillset.

However, this sharply dressed 53-year-old is at least returning to a business he once knew well, stepping back in time to rejoin a company he worked at two decades ago.

His road trip of the industry since then has taken in a period at Japan’s Toyota, spells running the Lancia and Alfa Romeo brands, the leadership of Fiat, then a move to Volkswagen Group, where he was a senior director at Audi and, most recently, headed the German company’s Spanish subsidiary Seat.

Although he never mastered Japanese (he tried and gave up) while working at Toyota, his experience at the group may help his cause in developing closer links with Renault’s combative bedfellow Nissan.

“He is a cultural sponge,” said one person who worked closely with him at Seat. “When you are capable of dealing with so many cultures, it’s not so different to add one more.”

READ ALSO  Virus success brings strong recovery in retail sector

His natural consensual management style and attention to detail may also help him when dealing with Nissan, where the Japanese corporate skill of nemawashi, softening up team members and superiors to new plans before official meetings to help them run smoothly, is greatly prized.

Ahead of key meetings, former Seat colleagues say he reads everything, asking questions and garnering a wide body of opinion before coming to decisions.

“He prefers dialogue to dictatorship,” recalled one former colleague.

That would mark a distinctive contrast to Mr Ghosn, who favoured a more autocratic leadership style and previously said the company could not be governed by “consensus”.

Yet Mr de Meo’s collegiate approach, he often uses humour in meetings to make his points and get his way, may prove essential to mend relations with Nissan.

His easy-going manner — he has been known to send WhatsApp messages or emails filled with emojis for light relief — also hides a tenacious core.

It is this drive that helped him revitalise Seat, where he boosted sales and profits after the introduction of new sport utility vehicles.

He managed to “make margins and create enthusiasm that I haven’t seen in Seat for 10 years”, said José Asumendi, an automotive analyst at JPMorgan.

Former colleagues added that his experience of leading “underdog brands”, such as Seat, as well as his team-player approach, will be useful in the Renault hot seat.

“He’s an expert at doing lots of things with very little resource,” said one.

Ultimately, his ability to defuse the tensions — political, diplomatic, and commercial — that face the carmaker will cement or destroy his image as a team player and turnround maestro.

READ ALSO  Lee Kun-hee, Samsung family patriarch, 1942-2020

As one VW insider recalled: “Going to war is always his last option.”