Bernard Vernier-Palliez was hired in 1945 by Pierre Lefaucheux, Renault's first chairman after World War II. The two had met in a French Resistance organization. Vernier-Palliez became secretary-general of Renault in 1948 at age 30. He was quickly dubbed 'VP' inside Renault and served as the unofficial No. 2 executive during the 20 years Pierre Dreyfus was chairman, from 1955 to 1975.
In 1967, Vernier-Palliez was appointed deputy general manager, responsible for Saviem, Renault's truck division. In 1975, he succeeded Dreyfus as chairman. In late 1981, after 37 years with the company, he left to become France's ambassador to the USA.
Q: How did you join Renault?
A: It was a matter of total chance. When I was a young man, I intended to become a diplomat. Before taking the necessary exams, I wanted to take care of my military service requirement, which was two years at the time. So in 1937, I joined the Army at age 19. I should have been discharged in September 1939. Bad luck!
After the armistice in 1940, I started preparing to take the exams in order to enter the French diplomatic service. Simultaneously, I worked (in the Resistance movement) with Andre Postel-Vinay, who was Pierre Lefaucheux's brother-in-law. Postel-Vinay was arrested in December 1941, and I left France in 1942 through Spain to join the allied armies in North Africa.
In December 1944, I came back to Paris from Alsace and I met Lefaucheux, who had just been appointed interim director of Renault. He told me: 'Why don't you come with me and work with Renault?'
I arrived at Renault in May 1945. My first job was to be the representative of management in Renault's workers' council. I thought I would stay one year. I stayed for 37 years!
Q: Why was Renault nationalized in 1945?
A: The company was 99.9 percent owned by Louis Renault and was seized because of its activity during World War II. The Regie Nationale des Usines Renault, created by a bill in March 1945, gave it a very special status. It was a 100 percent state-owned company, but the top management had complete freedom to manouevre in respect of the fact that competition was the rule in the auto industry.
In 1945, the main problem was to rebuild the Billancourt plant, which had been bombed during the war, and to start production again. Pierre Lefaucheux paid attention to the future as well as to reconstruction, and the future meant the launch of the 4CV (quatre chevaux) in 1947.
Q: How did Renault grow in the 1950s and the 1960s?
A: Pierre Lefaucheux planned to expand first in Europe. The Spanish operation FASA was created in 1953, (then) a license agreement to make the 4CV was sold to Hino of Japan.
Simultaneously, a product range strategy was set up, including a small car, the 4CV, then the top-of-the-range Fregate sedan. The Dauphine appeared in 1956, a 1,000 units-per-day program.
The Dauphine demanded a big investment, so Pierre Lefaucheux had decided to leave the truck business. A truck subsidiary, Saviem, was created, with Schneider, a big industrial concern, as the main shareholder. A few years later, Schneider asked Renault to buy Saviem back.
Renault's growth was self-financed during these years. The strategy was simple. The new plants were set up when it was necessary: Flins was built to make the Fregate, then the Dauphine; Cleon to make engines, Sandouville and Valencia, Spain, to add more assembly capacities.
Q: Tell me about Pierre Dreyfus?
A: Pierre Dreyfus was a top civil servant and a director with Renault's board. When Pierre Lefaucheux died in 1955, the top management chose him as Lefaucheux's successor and arranged it so that the French government appointed him as chairman.
Dreyfus had a feel for the product and the instinct of a salesman. He also thought that social progress was of great help to the company because it brought homogeneity. He was a man of reflection who became a manager in a few months. Dreyfus maintained Lefaucheux's policy of limiting state intervention.
Renault was going well, so Dreyfus continued on until the age of 67. When I succeeded him, I said I would keep the job no longer than six years, because I would be 64 in 1982.
We learned a lot from Pierre Dreyfus.
Q: How did Renault embark on its American ventures, first in 1956-1958, then in the late 1970s?
A: Our basic idea was to look at the United States as a very big market that was opening to European cars at a time when France's trade balance was in the red. We thought that if we succeeded in gaining a new market and in filling a little of the French state's purse, we would have done a good job.
So the Dauphine was launched in the USA. But the car did not fit the American market. Secondly, the sales ramp-up went too quickly, with 100,000 units during the first year. The dealer network was built at top speed, so it was very flimsy.
In the mid 1970s, the USA was still the biggest market outside Europe. We were present in all of Latin America. We had built plants in Eastern Europe. So we went to the USA in two markets: trucks and passenger cars.
In 1977, we bought a 20 percent stake in Mack Trucks. In 1978 we took a first stake in American Motors, and by late 1980, Renault held 46 percent of AMC.
We thought we would one day make a specific car for the American market.