Renault CEO warns more cost-cutting may be needed

Renault CEO Luca de Meo has warned that more cost-cutting measures may have to be implemented in order to turn the company around. This is on top of the 2 billion euros (RM9.86 billion) cost cuts it had already set in motion, which involved laying off 15,000 employees and production shrinkage.

“The aim is to get back on the right track and to resolve our most pressing problems as quickly as possible: treasury and costs. This means we will perhaps need to go further than planned with our cost-cutting efforts,” de Meo said in an internal memo. However, he did not reveal any figures.

According to Automotive News, a Renault spokesman said de Meo is currently working on a plan to transform the company by focusing more on profitability instead of sheer sales volume. The automaker admitted in May that its global ambitions had been somewhat unrealistic, and the 7.29 billion euro (RM36.3 billion) loss in 1H 2020 was a “disturbing wake up call.”

“We are currently touching the bottom of a negative curve that started several years ago, and probably even earlier. We are in a complex, difficult situation. We all are. But… we were already, I would say, feverish. So for sure it is even harder for us,” de Meo said regarding the company’s 1H 2020 result.

To turn things around, de Meo told Renault employees: “We will need to take decisions that are sometimes difficult, but are necessary and positive for the company. I would describe it as a revolution. This revolution, which must be pushed forward by all the men and women of the company, I’m calling it a ‘Renaulution’.”

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