With Louis Schweitzer's appointment as chairman in 1992, Renault revived a tradition that started with Pierre Dreyfus: appointing chairmen from inside the company.
Born in 1942, Schweitzer is a typical 'haut fonctionnaire' (top civil servant) who turned into a successful industry manager. After graduating from Ecole Nationale d'Administration as an 'inspecteur des finances,' he started his career in 1970 with the French budget office.
In 1981, he became the top assistant (directeur de cabinet) to Laurent Fabius, who later served as minister of budget, minister of industry and finally prime minister.
Schweitzer joined Renault in 1986 and was named chief financial officer in 1988.
In 1990, Raymond Levy appointed him executive vice president, which put him in line to succeed Levy in 1992. In 1994, after Renault's merger with Volvo failed, Schweitzer started the company's privatization process.
Q: How did you become chairman of Renault?
A: I was put forward by Raymond Levy and other top managers. To become a chairman, you don't need specific qualities, but you must be recognized. People must think that the person who runs Renault is legitimate, thanks to his qualities or experience. If recognition does not exist, the ability to lead the company does not either. The personalities may be very different, like those of Lefaucheux, Dreyfus and Levy.
Q: In 1992, when you became chairman, things were going well for Renault. A year later, the European car market went into a recession and the merger with Volvo collapsed. How did you manage?
A: In 1992, Renault's situation was very good in a very good marketplace. We were on top of the world. Then some major breaks occurred. First, increases in car prices stopped in Europe. At the time, we thought it was linked to the fall of some European currencies in the summer of 1992. Then it appeared to be a structural change. Then the market fell. Renault got through it better than other competitors, thanks in particular to its Turkish operation. But the big issue until 1993 had been the merger with Volvo. The breakdown in late 1993 was a big shock and a major disappointment for me.
Q: What was the key factor in the breakdown?
A: The key factor was Renault's shareholding. The French state usually did not interfere with Renault's management. But a merger between Renault and Volvo was a shareholder decision. The public shareholder was not able to move quickly enough. It was too cautious. It had other concerns, mainly political ones. On top of this, the French political situation was very unsteady at that time, with four governments in less than four years.
Q: Did this failure help to start Renault's privatization?
A: As early as 1991, I was convinced that public shareholding was a handicap for Renault because of its slowness. So after the break with Volvo, privatization was my top priority. Inside Renault, it was a non-issue. But in French politics, Renault had kept a high symbolic value. So the French government was worried. In 1994, I obtained, not the privatization, but the opening of Renault's capital. Everything went fine. No strikes happened and most of Renault's employees bought shares.
Q: Did you foresee the success of Megane, including Scenic?
A: I think I have foreseen its success more than other people have, but not to the extent it actually reached.
The Megane program was decided on in 1991, but I was in charge. Regarding the Scenic, I overruled the product planning manager and decided to make a steel-body car instead of a plastic-body car, like the Espace.
A steel body allowed more flexibility and was cheaper. My idea about the Scenic was to make an affordable minivan for European customers.
Q: What's the next step in terms of privatization?
A: I don't know. My experience tells me that governments do not act step by step. Today, the present shareholding is not a handicap for Renault.
Q: Do you think Renault is now ready to expand again?
A: In 1984, Renault was overstretched. To stop the relentless pursuit of growth despite evidence of the dangers of growth was an absolute priority. Today, we have got a much more robust base of operations again, and we can regain our dynamism.
I remember when I joined Renault I was surprised to learn that Renault held 10 percent of the European market, but its market share was mainly in France, Spain and Portugal, all three protected markets. So even in 1988, Renault earned a lot of money in these countries, but lacked a solid foothold in Europe.
Renault has a calling for expansion. It's a genuinely French company, but it has some characteristics that make it able to expand.