Lately, all the talk of CEO departures has been preceded by phrases like “fired out of a cannon” and “catapulted into outer space by an angry board.” The car industry has been in a period of rapid disruption, and few executives have gotten it even mostly right. Who has been the best automotive chief executive of the last five years? I’d argue it’s the one guy who was also smart enough to get out while the getting out is still good.
I’m talking, of course, about Renault CEO Luca de Meo, who is not only leaving the company but also leaving the automotive industry entirely. I think it’s worth starting out The Morning Dump by talking about how he’s been successful in spite of facing mostly the same challenges as everyone else, and also talking about what it means that he jumped ship.
Jaguar Land Rover has a bit more insulation from tariffs due to both the proposed trade deal and the lower price sensitivity of its Land Rover brand. Is that enough to spare it entirely? Nope. Even JLR expects to take a hit this year. It could be worse; longtime industry supplier Marelli is entering bankruptcy, owing hundreds of millions of dollars to Nissan and Stellantis.
If there’s one large company in the auto industry that’s likely to survive the turmoil, it’s Goodyear. Due to the way the company is structured, it’ll probably float over the incoming trade barriers like some sort of… hovering plane? I’m not sure there’s an English word for it.
Luca Goes To Gucci
Luca de Meo has had an interesting career path, but one that’s largely been confined to automotive. Born in Milan, de Meo has bounced around between Renault, Volkswagen Group, and FCA/Proto-Stellantis. You might have first heard his name when Sergio Marchionne appointed him CEO of Fiat, where he decided to resurrect the Fiat 500 we all know and love. He was then put in charge of VW’s SEAT subsidiary, turning that company around into a highly profitable brand.
Quietly, de Meo has been one of the most successful turnaround artists in modern automotive history. His leadership is grounded in having a clear mission, and serving it first with great products and second with efficient production/management. The de Meo philosophy seems to be: A great car that you can’t affordably produce is no better than a mediocre one that you can. A focus on clever marketing is also a key strength of de Meo’s when you look back at his career.
When he was appointed CEO of Renault in early 2020, he was probably aware of the many challenges facing the relatively small automaker, even if he didn’t know a global pandemic was coming. The partially state-owned automaker had experienced a long period of decline and was dealing with a messy divorce from Nissan. Being a mostly European company at the time seemed like a challenge, and de Meo’s five-year plan for Renault called for the company to dramatically improve its products while at the same time preparing for electrification with smaller, more attractive, more affordable electric cars.
It worked, and by 2023, the company was increasingly profitable and seeing improved margins. Last year, the company absolutely killed it. Renault under de Meo hit a record $4.49 billion profit and a better-than-projected margin of 7.6%. As Adrian wrote last week, cars like the new Renault 5 E-Tech represent a company that’s at the top of its game and ready for a new world. If anything, Renault’s perceived weaknesses were really its strengths. It didn’t rely on China for exports. Production was just stretched out enough to allow it to hedge. And by focusing on Europe and similar markets (Latin America, Northern Africa), it was able to build highly competitive products in a narrower set of classes. Also, its electrification has always been built on affordable cars, which was the right approach.
So how is de Meo celebrating his success? He’s getting out of Dodge. Or, more specifically, he’s getting out before he’s asked to take over Dodge, Hyundai, Volkswagen, or any other group. According to The Wall Street Journal, based on a report from French newspaper Le Figaro, he’s going to Gucci parent company Kering:
Renault said de Meo plans to step down in mid-July. Kering declined to comment.
“There has been a sense that more experience and gravitas in senior management would be appropriate” at Kering, analysts at Bernstein said in a note.
Kering’s share price has fallen by around 78% from its peak nearly four years ago after turnaround plans for its flagship Gucci brand failed to reignite interest in the label. Earlier this year, the group parted ways with Gucci’s creative chief Sabato De Sarno, two years after he was appointed to revitalize the brand and reduce its reliance on seasonal designs.
Why would de Meo jump to a struggling luxury brand now? Here’s de Meo’s statement:
“There comes a time in one’s life when one knows the job is done. At Renault Group, we have faced immense challenges in less than five years! We have achieved what many thought impossible. Today, the results speak for themselves: they are the best in our history. We have a strong team and an agile organization. We also have a strategic plan ready for the next generation of products. That is why I have decided it is time for me to hand over the baton. I am leaving a transformed company, poised for the future, to apply my experience to other sectors and embark on new adventures.” shared Luca de Meo. “Leading Renault Group has been a privilege. It has been a human and industrial adventure that only happens once in a lifetime. For this, I will always be grateful to the women and men of this company – the ‘Renaulutionnaires’ – for their passion, their commitment and their conviction. They are the true driving engines. Moreover, I would like to thank Jean-Dominique Senard for choosing me several years ago, for his support and trust, as well as the Board of Directors, for believing in our projects. And the best is yet to come…”.
With an enviable record, de Meo is absolutely going out on top. Barring any surprise discoveries, he will long be remembered as one of the best automotive executives of this new century. While he could go to a larger automaker, or potentially merge some companies into one large group (BMW and Stellantis, for example), there are not many great jobs left in automotive at his level. There are only hard jobs, and he’s already done the hard job of turning around automotive brands multiple times.
I also think it’s not going to get easier. While Renault is profitable now and less exposed to tariffs, the increased tariff exposure of the company’s competitors might see them retrench a bit in Europe. Sporty Renault brand Alpine was supposed to come to the United States, but is that going to happen in an environment where it costs an extra 25% to import a car? It seems a lot harder than it did just a year ago.
Many executives have a difficult time leaving while on top, and instead stick around long enough for the board to toss them aside. I respect de Meo for sensing when it was time to leave. Also, as an Italian, leading a luxury marque like Gucci is probably a nice transition away from cars. I’m sure it’s just as difficult, so it’ll be interesting to see how he does.
Who will replace him? If he’d just hung around a little longer, I could see the return of Carlos Tavares, but that seems less likely now. There are a bunch of former Renault execs at Nissan who got passed over for the top job at the Japanese company who might be interested.
JLR Trims Its Margin Forecast For 2026 FY
I recently drove the new Land Rover Defender for the first time and greatly enjoyed it. I need to write it up (and about five other reviews, sorry! We’ve been busy). While Jaguar has been in a period of trying to find itself, the Land Rover side of the business has been doing great.
Will it continue to do so under President Trump’s tariffs? The customers might be less worried about a price increase than Dacia buyers, so that’s nice. Even better, many of the cars are built in the UK and, so far, the deal with the UK seems to be quite beneficial to British carmakers. So why is JLR trimming back its margin forecast for the year? I’ll let Reuters explain:
While JLR’s Range Rover SUV lineup is built in the U.K., the popular Land Rover Defender is made in Slovakia, an EU member. The EU does not yet have a trade pact with the Trump administration.
The automaker said it is assessing pricing actions in the U.S. to help offset the tariff impact.
Save the Defenders (from a nominal 6-7% price increase)!
Marelli Owes $866 Million+ To Brands, Blames Tariffs For Bankruptcy
Marelli is one of those Tier 1 automotive suppliers like ZF and Bosch that, while not quite household names, are companies most enthusiasts are at least vaguely familiar with because they do everything (lighting, telematics, suspension, exhaust, whatever). The brand was formerly known as Magneti Marelli for years under its Fiat ownership, before being merged with a Japanese company (Calsonic Kansei) to create Marelli.
This explains why its biggest customers were/are Stellantis and Nissan [Ed Note: I used to work with Magneti Marelli all the time when I worked at Fiat Chrysler. -DT]. And, wow, they owe both a ton of money according to bankruptcy filings. How much? $453 million to Stellantis and $313 million+ to Nissan. That’s to say nothing of deals with Tesla, Mazda, and others.
These supply chains are not exactly easy to replace, so automakers seem to be willing to wait out the bankruptcy proceedings. The company has also gotten financing to continue operating, according to this Detroit Free Press report:
The court granted Marelli access to $519 million of $1.1 billion in debtor-in-possession financing — a special loan process for companies going through bankruptcy. Using those funds, the company plans to keep the business afloat and continue paying suppliers and employee wages and benefits in full, according to court filings. No layoffs are planned.
Marelli is headquartered in Japan and does much of its business across borders. While the brand has struggled financially for several years, including a failed debt resolution process in Japan in 2022, Marelli North American CEO David Slump ultimately cited tariffs as the cause of its bankruptcy.
“Marelli was severely affected by tariffs due to its import/export-focused business and the imposition of tariffs specifically against automotive manufacturers and suppliers,” Slump said in a court filing.
Was it entirely the tariffs? Probably not, but they didn’t help.
Why Goodyear Isn’t Sweating The Tariffs
Goodyear just threw a party to celebrate 100 years of the Goodyear Blimp with a bunch of other mascots, which is how we get the image above. That’s quite the trip.
It’s not a bad time for Goodyear to celebrate, however, as its particular tariff strategy puts it in a way better position than many of its rivals.
As other suppliers fret huge costs and strategic facilities moves to deal with punishing 25 percent tariffs on non-United States-Mexico-Canada Agreement-compliant goods, Goodyear is sitting pretty. Only 12 percent of the company’s supply for the U.S. is sourced outside of the USMCA, and its Canadian and Mexican factories are fully compliant, according to a May 8 financial results call.
The company estimated a $300 million total tariff impact and predicted that competitors could face three to four times that amount.
“We feel we’re in a really favorable, strong position,” said Mark Stewart, Goodyear CEO, on the May call.
That’s right, you ain’t out here partying with the Teletubbies if you’re not feeling yourself.
What I’m Listening To While Writing TMD
What was it like to be a part of “culture” in 2011? An Oakland-based Jewish white girl rapper named Kreayshawn got a surprise viral hit with “Gucci, Gucci.” It’s not Mac Dre, but it’s pretty catchy.
The Big Question
Who ends up as CEO of Renault?
Top Photo: Renault
Who ends up as CEO of Renault?
I’ve submitted my application. Cross your fingers.
A different rich guy who “worked his way up to the top” by consistently “pulling up his bootstraps”, “getting back on the horse” and “pulling the reigns.”
Apparently, accordng to the thumbnail, Luca de Meo has found the answer to Life, The Universe and Everything
The answer is quarante-deux, it seems.
I hope he remembered to pack-up his towel before vacating his office.
As a working-class man, I’ll never understand the CEO class. Fellow looks to be in his late 50s, probably has plenty of dough, and doesn’t like his job. If that was me, I’d just walk away and take up a hobby.
So Marelli owes their customers money?
**reaches for old economics textbooks**
Gucci and the like are in big trouble from what I’ve read. Only a few luxury brands didn’t burn their customers horribly through covid, and Gucci was a top offender. This guy has his work cut out for him, but if he’s managed some of these other train wrecks, he’s probably the right pick.
Company failing for 4-5 years, probably more. “Oh yeah it was the tariffs from 3 months ago, that haven’t even really ever been turned on, that did us in”.
How are we pretending that’s even part of the real problem here?
Since under his lead Renault became a manufacturer I’m not likely to buy a car from, he can go to hell!
What has he done? Let’s just say I don’t want a car with a french-chinese engine if I’m planning to buy a Renault (or a Dacia).
The next CEO is obviously Kreayshawn.
Luca de Meo: Renault -> Gucci
Kreayshawn: Gucci -> Renault
Why? Cause them basic bitches wear that shit, so she don’t even bother.
It’s a real riches to ragtops story.
OK, I’m gonna continue to beat my… drum about the unfair and unequal treatment of FIAT. You consistently use the acronym SEAT in all caps, as you should, but you don’t give the acronym FIAT the same reverence. And don’t give me that crap about reducing confusion with a commonly used word in the case of SEAT, because it also applies to FIAT. In the case of FIAT, it’s even more appropriate to use the all-caps version because the common word is pronounced the same as the acronym (while it isn’t in the case of SEAT). On both company websites, they consistently use ALL CAPS for their names, and I think they both deserve the same degree of respect.
https://www.fiatusa.com/
https://www.seat.com/
Is this some kind of anti-Italian or pro-Spanish bias? This aggression will not stand, man.
Fiat Is an Answer Too!
Fix It Again Tony
Only the 124 Spider.
unless it is a Miata with an arguably better looking body?
For years Goodyear had a blimp stationed in Spring, Texas (N. Houston). After Goodyear moved the blimp to Akron, the hanger was dismantled. Just before that happened Genesis used it for pre-production I Can’t Dance tour. In 1992 it was the only building they could rent large enough to house the first ever use of Jumbotron’s for touring. It had 3 sets that leaped frogged the country. I was lucky enough to have a chance to secure both the pre-production and the concert in the Astrodome. Glory days as The Boss would say.
Apparently the official name of the book in French is ‘Salut, et encore merci pour le poisson’ – that’s a bit closer to ‘Good day, and thanks again for the fish’
https://fr.wikipedia.org/wiki/Salut,_et_encore_merci_pour_le_poisson
Translation is weird.
My sister (who went to school for French and education) works at a language immersion school that teaches in Spanish and Mandarin. She has been doing it long enough that she can translate directions from one language to another. She says that each different translation is like learning a unique language with special rules and methods.
Fun fact. For years Japanese technical manuals would be translated to French and then from there to English. Apparently this was due to the best translation school in Japan training people French first. There was definitely noise introduced into the signal.
The old (derogatory) term Japlish was often blamed on this.
Very interesting! My sister’s stories would align with that!
Really should have been “Japanglais,” but that’s a nit for someone else to pick.
Don’t know why I didn’t notice the HHGTTG reference, my first association was Julie Doucet’s title Leve Ta Jambe, Mon Poisson Est Mort! which is nonsense when taken literally but kinda racy in Quebecios.
I have worked with executives that were good at their jobs but not passionate about the company (as well as plenty that were the inverse), and I wonder if de Meo is simply at that point in his career where he can simply transition into a role where he can both accel and be passionate? If so, may we all be so lucky.
Does USMCA, or any pre-agreed trade agreements, mean anything anymore?
Perhaps after the G7 we might have better idea how it goes.
The problem with being the World Police is that if you decide to break the rules there isn’t anyone to call you out for it.
Roosevelt used to say ‘Speak quietly, and carry a big stick’ for a reason, and most presidents since then have followed along with the conceit.
In the short term ignoring the rules can further policy aims, but longer term it becomes very difficult to get other countries to play by rules they now think the US might ignore if it doesn’t suit them.
Pretty sure TCG doesn’t know the definition of the word “quietly”.
I completely forgot about that song.
Now I will spend my lunch break on theRealReal looking for pieces from the Adidas/Gucci collab a few years ago.
Not the worst way to vacate the position of Renault CEO.
Goodbye and thanks for Douglas Adams reference.
The best laid plans of mice…
Le reference de Douglas Adams est tres manifique!!! (Done in fake french, not Google translate, before the Acadamie Francais comes after me.)
With all this economic uncertainty, I’m glad I know where my towel is.
I’ll never understand the incessant desire/ego to want to continue in business (and all of the learning, hassles, and time commitment involved) after all these successful years doing it. To paraphrase The Onion, I’d at least want to retire early to spend more quality time with my money. I would almost understand it better if he stayed in the auto biz. Who knows, maybe the Gucci job is a piece of cake in comparison. I’m not trying to be an armchair QB here, I just spent way too many years in companies where old people filled all middle and upper management roles. It was only many years later that I realized how much that hurts the upward mobility of everyone else. I believe in the “be a mentor and then get out of the way” approach if you’re financially independent.
I’m sure that drive to keep working has helped him be successful.
I think the size of the company you are dealing with is part of the equation. When the company is large and international, I think there is a personality type that even wants or strives to be there. I think most of those people define themselves mostly by their business success. Being a high level businessman is their passion. So why retire, when you get paid vast sums to do what you are passionate about?
I myself am not like this. My passion is not making someone elses company make more money. But that also means I lack the ambition to strive for a top level position and the pay and lifestyle it might bring.
Having worked at a lot of big, global corporations at this point, I’ve known a lot of executives and what I’ve learned is that the common perceptions about most of these guys (and indeed, most people in general that reach a certain level of success) is not accurate at all.
People seem to think you gain a lot of financial success and you have all this disposable income lying around. That is certainly true for a higher percentage in the tax brackets we’re discussing but you’d be pretty surprised by how few high-income earners really save a lot. I’m (almost) sure this is not the case once someone gets to CEO levels of wealth but the reality is nearly everyone in the US spends right at, or just above, their income levels. We all tend to assume that our current income will continue forever or only go up as we continue our career.
So, while I do think that the drive to keep working and finding joy in work is a large factor in what makes guys like this successful, a lot of the people you mention that stay in the role for so long are at their highest income of their career and probably just got started saving for retirement after 50 years old.
There’s a reason the government lets you save a larger percentage pre-tax once you get to 50 or 55 or whatever it is. They know that most people put it off way way too much.
Just because they might be smarter than average or make more money than most doesn’t mean they had a retirement plan or did what we all know we’re supposed to do in saving for retirement. Sadly.
He should pull a Hotblack Desatio and take a few years off dead for tax reasons.
I am waiting for Gucci interiors to come back. Perhaps Renault should have made the connection and revived the Matador to sell as a Dodge or Chrysler product along with the Hornet?
Who ends up as CEO of Renault? Garlos Chosn, who has arrived in a drum case and looks suspiciously like Carlos Ghosn, but with glasses and a mustache, so clearly not the same person.
Great, another company handed over to the Marxists.
I think the Marxists are great (Groucho, Chico, Harpo and Zeppo, in particular).
And coincidentally, also frequently travel in large cases/trunks.
Thatsthejoke.jpg 🙂
Far better than one of the typical corporate Stooges.
If we’re all lucky here, Tavares, so he can be pictured above.
Doesn’t the guy in suspenders, pictured above in the goodyear photo look a lot like Matt?
Matt, pictured above…has a nice ring to it. I wonder if anyone working here would change his bio photo to that for a bit.