Will Luca de Meo make Renault a national champion again?

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Beyond the break with the obsession with volumes that characterised the 2017 plan, which has been emphasised many times, the plan presented by Luca de Meo on Thursday also breaks with a perceptible tendency under Carlos Ghosn to dissociate the fate of Renault from that of the France site. More generally, one perceives in the speech and the course taken a clear, almost patriotic will to link Renault and the country by a form of new contract. Even if contrary signals have to be integrated into the analysis, this course can in the present state of affairs convince observers and stakeholders. It is up to Renault's managers to make it concrete in the months and years to come.
 
We already underlined it when, in September, the 18 pages written by the new boss of Renault and intended for the Trade Unions (TU) had leaked, the proposed turnaround is not reduced to the passage from a logic of volume to a logic of value, it also concerns Renault's relationship with France. Thus, Luca de Meo (LDM) wrote in September: "My vision for France is the following: we must reconnect with our territory. All strong brands are leaders in their own market. For us, it's a question of knowing what value we can bring to the country".
 
 As he gave himself several months to move from the 18 pages resulting from the first meetings and analyses made during the summer to this plan presented collectively on Thursday, everyone wondered how these laudable intentions were going to be put into practice and, therefore, whether the favourable a priori that resulted from them would be able to persist. More precisely, when one evokes the relation of Renault with "France", one must essentially have in mind five central "stakeholders" in the life of such a company: the customers (households and companies), the suppliers, the employees and their representatives, the local public authorities and more generally the territories linked to the productive and research activity of Renault and the State, both shareholder and responsible for the economic, industrial and foreign trade policy.
 
At these five levels, even if doubts or questions may persist, the presentations of the four leading figures who are now the bosses of the four brands, as well as the answers they gave to the questions that followed, are rather convincing: the distances that Carlos Ghosn seemed to have taken from the outset from "France" -or even from the very idea of the company's "nationality"- are likely to diminish and allow for the "reconnection" evoked by LDM in September.  
 
Of course, if we look at the half-empty glass, we can of course find strong objections to this thesis, mainly in two areas.   The first objection is that the main promise associated in September with Renault's re-engagement in France was - and remains - that of the assembly in France of an electric vehicle (EV) to be offered to customers at a price of less than 20,000 euros. This promise remains for the moment a promise and, where LDM could have reserved a sort of state of grace by making the announcement in January, it prefers to insist on the extent of the industrial and economic challenge associated with the said promise and make it a margin for negotiation with all the stakeholders and in particular with the TU and the local and central public authorities: "It hasn't been decided yet. We will need the support of everyone - trade unions, suppliers, public authorities", thus answered LDM to a question on this subject.  
 
We believe we have understood that the emblematic R5 project would only make sense - including with regard to customers - if Douai were to host the assembly. The Renault management knows how important this victory is - including in the election - to Xavier Bertrand, Emmanuel Macron and the TU.   Everyone will have at heart to show at the end of the negotiation process how much they weighed in the decision. Renault's managers who know this intend to play it off to trigger some kind of downward bidding: it's fair game and shareholders and analysts would not understand if Jean-Dominique Senard and LDM made this gift without using this political advantage.  
 
As the statements made by Luciano Biondo to the Voix du Nord show, the Douai hypothesis still largely holds the rope and it is rather by placing them in this perspective and, by showing how much France would lose if it is not validated that Renault leads the negotiations. It's clever.
 
The second objection concerns the dossiers on which the "nationalism" of LDM and its teams emerges as being rather relative. From this point of view, it could be considered that the prospect of an R5 assembled in France counterbalances - or makes more digestible - decisions in the opposite direction.   
 
 In this category, on the industrial side, we would classify :
- the launch of the Twingo ZE which takes up the spirit - and the graphic designer - of the launch campaign of the Twingo 1 almost thirty years ago to ensure the commercial success of a model that is no longer assembled in Flins - like the Twingo at the time and like the Zoé today - but at Novo Mesto in Slovenia;
- the launch of the Dacia Spring, which should be associated with high sales volumes, will benefit in France from significant purchasing aid like all  EVs in 2021 and 2022, but will be imported from China;
- the assurances given to Spanish factories and employees during the questions that the two assembly sites of Valladolid and Palencia would not suffer despite the replacement in 2022 of Mégane - assembled today in Palencia in its sedan and estate versions, thermal or rechargeable hybrid - by the e-Mégane assembled in Douai. I
n terms of technology and/or in the field of "the independence of Europe and France" in terms of key skills in the future of the automobile, we may also find some shadows in the picture:
- the autonomous vehicle is, in the division of labour leader-follower within the Alliance, the responsibility of Nissan which, between Japanese and Chinese support, is considered to be better able to pull the coupling;
- on connected services and their increasing importance in terms of the quality perceived by customers as well as their capacity to generate value, Renault relies first and foremost on its partnership with Google;
- In the key field of hydrogen and fuel cells, Renault will complete its collaboration with Symbio (Michelin-Faurecia) for the Kangoo, but will then count on its partnership with the American Plug Power in which the Korean company SK has just invested 1.5 billion dollars to green its LCVs - which we know how important they are for Renault in general and for the assembly of Renault vehicles in France in particular;
- in the field of batteries, there was no question of the Stellantis-Saft airbus but of possibly attracting to the Hauts de France centre a "major partner" - probably LG - to ensure a domestic supply for EV assemblies at Douai.  
 
Thus, the patriotism displayed by the Italian, in line with its President and in rupture, there also, with the Ghosnian doxa is not, far from it, an isolationism, and Renault also has to manage the Alliance and maintain relations with other nations such as Spain, Russia, Romania, Slovenia, Morocco or Turkey which, without being as fundamental, are no less crucial for the success of the plan. Despite this, the plan undeniably includes an explicit form of seeking a new deal between Renault and the French stakeholders.  
 
First of all, by evoking the return of Renault - and Dacia moreover - in the segment C, LDM cites the Scenic case and the employees of the Douai factory - which sadly celebrated its 50th anniversary in 2020 - can only remember that this segment C vehicle enabled their site to assemble up to 469,510 vehicles and employ more than 6,000 people fifteen years ago.  
 
The combination of the idea of a great return to this segment and the questioning of the "more Bs in France" doctrine for the electric vehicle is quite clearly an allusion to the good days of the assembly of Renault passenger cars in France. Luciano Biondo, the new industrial director of Renault's electric division, is even more explicit on this subject than LDM is when he declares to La Voix du Nord: "For years it has been repeated that it was impossible to produce electric C and B segment vehicles in France, these small city cars that are today at the heart of the market. I want to prove that it's possible and that it can be done in the North".  
 
In fact, the idea of the "Electro pole" centred in the Hauts de France, connected to Cléon for the turbines and capable of mobilising an ecosystem including a giga-factory can and must make it possible to break with a logic of competition between sites which has largely turned to the disadvantage of the French assembly sites for years. Clearly, if the R5 were to become - instead of or next to a new Zoé - the dream best seller, it would most probably be to the detriment of Clio and, consequently, the desire to avoid overcapacity, which is at the heart of the plan, could only turn to the disadvantage of other components of Renault's industrial organisation in Europe and, in this case, the Bursa site which, until now, had won all the arbitrations.
 
 t would be, in the astronomical sense of the term, a real revolution. The hope for the employees, the territories and the State is first of all there, and if we conceive that it is clever to postpone the firm commitment, it will be necessary to quickly remove the doubts to preserve the state of grace.   In the technological field, in connection with the return of the industrial policy which is taking shape under the French recovery plan and the European "green deal", Renault wants, without depriving itself of the means to differentiate itself from PSA (by abandoning its partnership with Symbio and by not embarking on the Airbus Stellantis-Saft), to appear as a committed and loyal partner of the State and the Regions.  
 
 Thus, in the field of energy and the circular economy, Renault is explicitly involved in public policy areas which will be worthy of significant support. LDM thus cited the production of decarbonated hydrogen as being on the agenda.  We know that Total and Engie have just signed a cooperation agreement to design and operate the Masshylia project. Even though its partner will now be American, Renault will have every reason to become a customer of the consortium and thus offer its French LCV assembly a life in the post-diesel era.  
 
In the same way, as Florence Lagarde emphasised on Friday, alongside the agreement with Google and as if to counterbalance it, LDM announced on Thursday that to "defend our sovereignty in these technologies", Renault is leading a collaborative project called Software République which will bring together players such as Orange, Atos, STI, Dassault, universities in a giant 100,000 m2 laboratory open to partners close to the Technocentre.
 
While the assembly at Flins will cease and will only allow the site to regain the level of employment it used to provide in the long term, that the RTX (engineering centres of emerging countries) and engineering subcontracting will increase in power, Renault is, one can believe, doing a little more here than lighting counter-fires: the French engineering companies, integrated in an ecosystem which, without exclusivity, plays a form of "national preference", are solicited on key dossiers for the future of Renault and the automobile. The glass fills up at least as much as it empties.  

The weekly column by Bernard Jullien is also on www.autoactu.com.

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