PARIS -- With Renault facing projected operating losses, Chief Financial Officer Thierry Moulonguet has relinquished managerial oversight of the 22-market Americas region to concentrate on the carmakers financial problems.
Renault will present its 2008 financial results on February 12 and analyst estimates are not optimistic. Most predict a dismal set of results for the second half of 2008 with worse to come during 2009.
Morgan Stanley analysts predict that Renault will report a 211 million operating loss for the second half of last year.
For 2009, Goldman Sachs predicts Renault will show a 232 million operating loss, while Credit Suisse estimates a 214 million loss.
Given the financial situation facing the company, it was decided that Mr. Moulonguet should concentrate on his principal activity, a Renault spokesman said.
Moulonguets responsibility for the Americas has been transferred to Jerome Stoll, the head of Renaults Brazilian operations.
In Europe, Moulonguet will find much of his attention focused on cost-cutting strategies and limiting cash burn. So far, this has included the cancellation or postponement of numerous new vehicle projects, important staff reduction plans, and scaling back new overseas production projects.
Moulonguet also must find a way to fund Renaults ongoing operations. Renaults auto bank finances about 9 billion in dealer floorplan and customer purchases annually. It still needs to find at least 3 billion this year to meet these needs, a spokeswoman said.
The ongoing shortfall is complicating sales to dealers and customers, as well as the funding of day-to-day operations and long-term investments. Plus, lending rates are higher than in the past, with short-term commercial paper (unsecured debt) running at 8 percent, compared to 4-5 percent in previous years.
Another pressing challenge for Moulonguet is to manage net debt -- estimated by Morgan Stanley at more than 7 billion at years end.
French President Nicolas Sarkozy has promised a 5 billion to 6 billion aid package for Frances struggling auto industry, and Renault is expected to win a large share of that.