PARIS — After watching a stream of top executives follow Carlos Tavares to PSA Group in the past several years, Renault scored a big win when it landed Gilles Le Borgne as executive vice president of engineering.
Renault's interim CEO, Clothilde Delbos wasted no time showcasing Le Borgne at the automaker's 2019 financial results presentation on Feb. 13.
Le Borgne, who watched Tavares turn around a money-losing PSA and later Opel with a relentless focus on efficiency, was blunt in his diagnosis of Renault and alliance partner Nissan’s engineering shortcomings.
“I saw huge assets, but also huge areas for improvements,” Le Borgne told investors, analysts and journalists who had gathered at Renault headquarters in Boulogne-Billancourt on the outskirts of Paris. “Engineering and capex-wise, we are really far from excellence.”
Le Borgne, 57, had a hand in most of PSA’s platforms and advanced projects over the past two decades. He joined Renault on Jan. 6.
His comments came as Delbos announced that Renault would seek to cut 2 billion euros ($2.2 billion) in operating expenses in the next three years. All areas are fair game for cuts, with “no taboos,” she said, language that was echoed by her counterpart at Nissan, Makoto Uchida.
These are tough times for the alliance, which has been reeling from the November 2018 arrest of Chairman Carlos Ghosn. Sales are down; Nissan announced its first quarterly loss since 2009; and Renault posted its first annual loss in a decade.
The two companies are intertwined financially (Renault holds 43 percent of Nissan, which has a 15 percent stake in Renault) and in areas such as purchasing. But Ghosn’s arrest revealed severe frictions between the Japanese and French companies, and generated reports that collaborations had come to a virtual standstill — which both Renault and Nissan executives denied.
Le Borgne is expected to play a central role in getting the alliance back into the black, Delbos said, adding that he was joining other “new talents” on the executive committee, including Denis Le Vot, the former head of Nissan North America, and incoming CEO Luca De Meo.
By any measure, Le Borgne is a leading star of the French automotive industry. He received an Automotive News Europe Eurostar award in the Product Development Executive category in 2018. Earlier this month, he was named “Man of the Year” by the French magazine Journal de l'Automobile, which cited his efficient and innovative r&d work at PSA and the expectation that he would revitalize Renault.
Le Borgne cited several areas where Renault is falling short, including validation costs, standardization and outsourcing. The group benefits from a worldwide network of technical centers, in Brazil, India, Korea, Romania and Spain, he said, but those assets could be better utilized. “We must leverage these assets and those competencies,” Le Borgne said. “It's not really the case today.”