August 29, 2013 / 2:50 PM / 5 years ago

Renault's Tavares steps down after hinting at U.S. move

PARIS (Reuters) - Renault SA’s (RENA.PA) second-in-command, Carlos Tavares, quit on Thursday, two weeks after he dismayed colleagues by hinting he might join one of the U.S. carmakers.

Renault Chief Operating Officer Carlos Tavares poses after the company's First-Half 2013 results presentation in Boulogne-Billancourt, near Paris July 26, 2013. REUTERS/Benoit Tessier

Tavares, chief operating officer at the French auto manufacturer, said in an interview with Bloomberg published on August 14 that he had “the energy and appetite for a No. 1 position” but was unlikely to succeed Chief Executive Carlos Ghosn, 59, any time soon.

“My experience would be good for any car company,” Tavares said in the interview. “Why not GM? I would be honoured to lead a company like GM.”

“It raised a lot of eyebrows,” a Renault insider who asked not to be identified said on Thursday. “How do you motivate your teams when you’ve said publicly you’d rather be at GM or Ford?”

Another colleague said Tavares’ departure followed an informal meeting on August 26 at which Ghosn “sounded out” senior company officials.

“It’s brutal, but what Tavares had said in (the interview) did not win him any friends.”

Tavares’ exit marks the second departure by a Ghosn lieutenant in as many years after his predecessor, Patrick Pelata, was ousted over his role in the wrongful dismissal of three executives.

“This is clearly bad news for Renault,” said Deutsche Bank analyst Gaetan Toulemonde. “Tavares is a real car guy, and replacing him internally is no easy matter because the alliance structure isn’t simple - you need someone who has a certain recognition at Nissan as well.”

Renault said in a statement that Tavares would cease to be COO immediately and his duties would be assumed temporarily by Ghosn, who also heads Japanese affiliate Nissan Motor Co Ltd (7201.T).

Tavares joined Renault in 1981. He moved to Nissan 23 years later as programme director for compact cars and rose to the rank of Americas chief before returning to Renault in 2011.


Ford Motor Co (F.N) spokesman Jay Cooney said the company has “succession plans in place for each of our key leadership positions” including CEO Alan Mulally, 68. Chief Operating Officer Mark Fields is widely seen as heir apparent.

“Our preference always is to develop talent internally, and we are fortunate to have a strong list of internal candidates,” Cooney said.

“He’s not coming here,” General Motors Co (GM.N) spokesman Greg Martin said of Tavares joining the company, now led by CEO Dan Akerson, who is 64. Chrysler, a unit of Italian automaker Fiat SpA FIA.MI, declined to comment “as a matter of policy.”

In his last Nissan role, Tavares slashed production costs with an industrial expansion in Mexico and won $1.6 billion in U.S. Energy Department funding for an electric-car battery plant.

His exit deals a setback to Ghosn’s efforts to revive the domestic industrial base with new production for 43.4 percent-owned Nissan and a renewed push into larger, plusher and performance cars.

Tavares also piloted a ground-breaking labour deal with French unions that introduced wage restraint and longer working hours in return for production commitments.

His determination to narrow the pricing gap with German rival Volkswagen AG (VOWG_p.DE) also helped deliver an unexpected increase in core earnings in the first half, despite falling sales.

Senior executives who have worked with Tavares say he would be well-suited to a high-placed role at a U.S. carmaker.

“He is one of finest auto executives in the world. And he is qualified to run any auto company or major supplier,” former Chrysler Group LLC CEO Tom LaSorda said in an email.

“The big PE/VC firms should grab him fast. Renault made a big mistake,” said LaSorda, who now runs a venture capital fund based in suburban Detroit.

Additional reporting by Christiaan Hetzner in Frankfurt and Ben Klayman and Deepa Seetharaman in Detroit; editing by David Cowell and Matthew Lewis

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