The new Renault boss Luca de Meo starts with a difficult legacy. The French are in a financial crisis and are writing billions in losses.
€7.29 billion loss in first half of 2020
The alarm bells are ringing at Renault: Due to the corona crisis and deep red numbers at partner Nissan, the manufacturer posted a loss in the first half of the year. The Group’s record net loss was 7.29 billion euros, compared to a profit of 970 million euros in the same period last year. Red figures of this magnitude are unprecedented, according to information from the group. “We have reached a low point,” said Vice Director General Clotilde Delbos in a virtual press conference on Thursday.
15,000 job cuts worldwide
The new Director General Luca de Meo, who has been in office since the beginning of the month, spoke of a “difficult situation”. He announced a new restructuring and strategy plan for January next year. The Italian wants to say goodbye to the hunt for sales records, which the former CEO Carlos Ghosn ordered with a hard hand. “I need some time to put things in order,” said the former Seat boss. Renault had already announced the reduction of around 15,000 jobs worldwide and cost savings of around two billion euros.
Nissan’s loss 4.8 billion euros
Nissan made a loss contribution of 4.8 billion euros to the French manufacturer in the first half of the year. Renault has an alliance of 43.4 percent in the Japanese manufacturer. The alliance, which also includes Mitsubishi, will not be questioned, said Delbos: “It is better to do this together,” said the top manager, who is also chief financial officer, about the cost reductions.
Sales declined by 34.3 percent in first half
According to its own estimate, the corona crisis cost Renault around 1.8 billion euros. Sales slumped 34.3 percent in the first half of the year to EUR 18.4 billion. Because of the uncertain situation, the manufacturer does not dare to make a forecast for the year as a whole.
State-guaranteed loan last lifeline
The group can now rely on a state-guaranteed loan of up to five billion euros – but has not yet used it. According to the announcement, the car division’s liquidity reserves amount to 16.8 billion euros. That is enough to bridge the crisis, it said in Boulogne-Billancourt.
Ghosn scandal contributed to the crisis
Renault and the auto alliance were already in crisis in the wake of the Autoboss Ghosn scandal. The ex-manager was arrested and charged on November 19, 2018 in Tokyo, among other things, for violating stock exchange requirements. In April 2019, the Brazilian-born was released from custody under strict conditions on bail. Ghosn then fled under dubious circumstances in a private jet to Beirut, allegedly hidden in a box. Japan is trying to extradite Ghosn, who rejected the charges against him. The French judiciary is investigating alleged misappropriation of Renault funds by Ghosn.