Raymond Haem Levy took over at Renault after Chairman Georges Besse was murdered by the French terrorist group Action Directe in November 1986.
Born in 1927, Levy holds degrees from the Ecole Polytechnique engineering school and the Massachussetts Institute of Technology. Before Renault, he spent most of his career with Elf, the state-owned oil company that has since been privatized. He became the No. 2 executive at Elf in the late 1970s.
Levy continued with the restructuring policy set by Besse. He sold American Motors Corp. to Chrysler in 1987, and in 1989 he announced the closure of the historic Billancourt plant, near Paris.
Moreover, Levy started to make state-owned Renault a more normal company. He improved quality, which became a cornerstone in Renault's strategy. In 1989, he began the process of merging with Volvo. It should have led to a natural privatization of Renault, which in 1990 had lost its status as a state-owned company. The merger was abandoned in late 1993, but the privatization process
began in earnest in 1994, led by his successor, Louis Schweitzer.
Q: What was Renault's situation when you succeeded Georges Besse?
A: Since January 1985, Georges Besse had made a U-turn on Renault's previous policy. He had launched a recovery process in all directions: sales, finance, management. He had eventually succeeded in crystalizing enthusiasm inside the company. My only duty was continuity with Besse's initiatives.
However, one year and a half of improvement was not enough. Renault's financial position was still bad despite the French state support: a FF5.5 billion net loss in 1986, a FF60 billion or so debt burden, shareholder funds still negative. Sacrifices were under way and they were very serious: work force cuts, frozen wages. Consequently, some big strikes occurred.
But one thing remained: the basic, fundamental qualities of Renault as a carmaker.
Renault would have never recovered if this were missing.
Q: During your chairmanship Renault gave up public status in 1990, sold AMC to Chrysler and allied with Volvo. Were these the high points?
A: My high points are different. They include the end of co-management with the CGT union, the emphasis on quality, the implementation of a cross-functional platform team organization, then a European and, through Volvo, global expansion.
The sale of AMC in March 1987 was my first key decision. Today, critics are countless. I even received anonymous letters about it a few months ago.
Besse had continued talks with Chrysler until the eve of his murder, but he had not concluded negotiations. Nobody inside Renault knew why. All the top managers, except one, were eager to get rid of AMC, which had lost a lot of money and represented a $2 billion financial threat for Renault. When I told a French minister that the deal with Chrysler was completed, he said to me: 'You've just left Indo-China.' Everyone was relieved.
Now Chrysler is being sold to a German company. So Chrysler did not hold out in the long run and you think Renault was able to hold out 10 years ago!
Q: How did you get the idea to merge with Volvo?
A: It was very simple. Apart from Renault's financial recovery, I had two main problems: the US and RVI (Renault's truck division). In the first half of 1987, I pulled out of AMC and I stopped supporting RVI. The capital was settled and we said: 'Now RVI must manage on its own.'
There were two positions inside Renault. First, that RVI needed a leader. Second, that RVI must be sold.
Louis Schweitzer, for instance, was in favor of selling it, but he very quickly accepted my rationale for not doing it: If I sell RVI, what remains apart from money?
Then the question was: Who can exchange something with Renault? Mercedes, maybe. Volvo, undoubtedly, because bringing Volvo and Renault closer had been a long-standing policy, begun by Bernard Hanon. It was a good policy.
Volvo was selling Renault cars in Scandinavia and we had a common engine.
Besse had sold Renault's stake in Volvo. I don't blame him for this; when he did it he was not able to do anything else.
So I said: 'Let's go.' On 22 February 1989, I met Pehr Gyllenhammar (Volvo's chairman) in Brussels.
Gyllenhammar had been in touch with other carmakers, like Volkswagen. There was a debate inside Volvo. Talks started with great difficulty. In August 1989, a Volvo office leaked information in order to provoke a scandal. Finally, on 23 February 1990, the agreement was announced in Amsterdam.
What was behind this? Highly complementary cars and trucks. Our truck division would definitely be reinforced. We would be going outside Europe by following Volvo in the Far East, in South and North America.
It was a miracle. Thanks to God, three different French governments succeeded in destroying the miracle.
Q: What was your reaction after the merger failed?
A: I thought it was a terrible accident. Gyllenhammar and I were determined to go further. We had frequently talked about a possible extension to the East and West. I'm just very sorry it did not work.