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Good morning.
Carlos Ghosn may be gone from the automobile business, but he is not forgotten. He was, after all, the first true electric car enthusiast in the industry. Wired magazine once said he was “either a brilliant visionary, or crazy as a loon.” His forecasts a decade ago were wildly optimistic—see my 2012 interview with him here, where he predicted 10% of new cars would be electric by 2020. (The actual number will be closer to 2%.) But he was directionally correct. And the new CEO of Renault, Luca de Meo, will benefit from his wild optimism in the years to come. Perhaps both adjectives—brilliant and crazy—apply. (He’s not the only auto executive for whom that’s true.)
Who is Luca de Meo? While not widely known, he is a consummate car executive, as Christiaan Hetzner details in his fascinating Coins2Day profile here. Indeed, those in the industry wonder why he hasn’t gotten a top job before now. He is credited with resurrecting the Fiat 500 back in 2007, more recently he turned around Spanish carmaker Seat, and he was once considered a candidate to replace Fiat boss Sergio Marchionne, who died in 2018. It’s a fascinating resume for a man only 52 years old.
The Italian beat out Clotilde Delbos, Renault’s finance chief and interim boss since the board booted Thierry Bollore last fall. I interviewed her at the Coins2Day Global Forum in November, and without talking about Ghosn, she made it quite clear what the Ghosn legacy means for Renault: “On electric [cars], it is not PowerPoint for us. It is real life. And contrary to others, we are not bleeding, we are very close to profitability.”
Asked about Tesla, she answered: “We are not competing with Tesla. We welcome Tesla. They helped prove an electric car can be a premium car. We are more a mass-market producer. The Renault DNA is to be able to do the exact car people want, affordable.” If the electric car future ever comes, Carlos Ghosn will have to be given a giant helping of the credit for getting us there.
Meanwhile, Nissan is not doing so well in the post-Ghosn era. Reuters reports it is planning a big round of cuts, eliminating 4,300 white-collar jobs and shutting two manufacturing sites. “The situation is dire. It’s do or die,” a person “close to Nissan’s senior management and the company’s board” told Reuters.
As for Ghosn, he is as outspoken as ever. In an interview with CNBC from Beirut, Lebanon, where he is hiding from Japanese authorities, he said: “If you’re a foreigner working in Japan, you have to be very careful, because unless the system changes, you’re playing with your life.”
More news below.
Alan Murray
@alansmurray
[email protected]
TOP NEWS
Les Wexner
Les Wexner is reportedly in discussions to step down as CEO of L Brands, the company behind Victoria's Secret (which may now be sold off to private-equity firm Sycamore Partners) and Bath & Body Works. Wexner has run the business for 57 years, making him the longest-serving CEO of an S&P 500 company. Wall Street Journal
H&M succession
H&M COO Helena Helmersson is to take over as CEO of the world's second-largest fashion retailer. Current CEO Karl-Johan Persson, who has held the role for over a decade, will replace his father Stefan as chairman. H&M just reported its first rise in annual profit since 2015, suggesting successful efforts by the Swedish giant to adapt to changes in the market. Reuters
Facebook fall
Facebook stock price fell 7% in after-hours trading following better-than-estimated Q4 revenues, but relatively high expenses. It seems Wall Street expects more outperformance than Facebook delivered this time. Growth is slowing in mature markets, and perhaps there is a hint of the firm's regulatory woes starting to catch up with it. Guardian
Facebook settlement
Staying with Facebook: the company has agreed to pay $550 million in one of the largest-ever consumer-privacy settlements. Pending judicial approval, the payout will help Facebook avoid a trial over its collection of user biometric data without consent. This is all about Facebook's face-scanning in photos, which has already provided major regulatory hiccups in Europe. Coins2Day
AROUND THE WATER COOLER
Shell shares
Shell's share price has tumbled by more than 4.5%, after the Anglo-Dutch energy giant reported a 23% profit drop between 2018 and 2019. The culprits are lower oil and gas prices and the global economic slowdown, which Shell warned could impact the timescale of its $25 billion share buyback program. CNBC
Deutsche Bank
Deutsche Bank reported its fifth annual loss in a row, this time of a larger-than-expected $6.3 billion. This largely reflects costs associated with CEO Christian Sewing's massive turnaround effort, which involves the cutting of 18,000 jobs by 2022. Reuters
Smartphone shipments
Smartphone shipments for 2019 were down 2.2% on the year before, according to preliminary figures from analyst house IHS Markit. On the plus side, the decline was a little better than the 2.4% drop experienced between 2017 and 2018. Samsung is still the market leader, and Huawei is still in second place—at least, based on the year as a whole. Look at the fourth quarter, and Apple is the one snapping at Samsung's heels. According to Strategy Analytics, Apple may have even taken the top spot in Q4. Bloomberg
Huawei EU
Speaking of the contentious Chinese telecoms giant, the EU has come up with a loose common plan for how to address its role in new 5G networks. It's no hard ban, but rather an agreement to allow EU member states to limit Huawei's role in the next-generation networks—much as the U.K. Just opted to do. Politico
This edition of CEO Daily was edited by David Meyer.
