GOLDING'S TAKE: Renault: Ghosn inherits a money-making machine…and a goose
Renault's profits waddled up on stage today as fat as a French foies gras. The operating profit was €1 billion better than last year which was itself a record year. It looked good, it smelt good and even after the financial journalists and analysts had probed and dissected it, it still felt good.
The share price bounced by 2% on the announcement and held on to its gains throughout the morning.
For chairman and outgoing CEO, Louis Schweitzer, this was an epic way to celebrate the handover of power. After 13 years at the top he hands over the Carlos Ghosn, the man who turned Nissan back onto the right road.
Extraordinarily, Renault's debt is almost completely eradicated making this a company vastly different to the one that was a drain on the French taxpayer. Just to emphasise the burgeoning health of the enterprise, the board awarded the shareholder a bumper 29% dividend increase and the employees a two week salary bonus. What might happen to the French unions' pay claim however, was a matter that was ducked at question time because of the sensitive stage of the negotiations.
When asked to reflect on his years in charge, Schweitzer described them as years of "change within continuity". But what has never changed and what would stay the same under Ghosn's regime, he said, was the freedom within the organisation to challenge the received wisdom. "That is part of our genetic make-up and will never change. There will always be a profitable growth strategy."
His best moment in the time since he joined the company in 1987 was the moment he heard at the Geneva Salon that DaimlerChrysler was not going to pursue its interest in Nissan.
His second best moment was seeing for the first time the hollow mock-up of the Scenic 2. "When I saw the dummies for the first Scenic I was not sure. When I saw this one I knew at once that it would do well." An interrogator wanted to know his downer. "The worst moment was the collapse of the negotiations with Volvo. The closures were very sad and affected the lives of so many people." But then, he brightened, if Volvo had continued, Nissan might never have happened.
Down the bottom of the income statement there was another bright line from Volvo. Renault's residual shareholding in Volvo is earning them money - thereby confirming the recent Ford statements of optimism (not quantified) about the returning profitability of the Swedish company.
It was churlish of the next questioner - at such a celebratory landmark - to ask about Formula 1. Did Ghosn have a different tolerance for the receding probability of outright victory? "Over the long period it does hinge on us being in the running for the title. We want to build suspense or our investment would not be worth it. We would like to break even in Formula 1. Carlos and I are in agreement but of course he will be free to reach his own decision."
The hostage to fortune of course is that his race team said two years ago that they wanted to be in a position to win in 2005 - this season. Motor sport insiders reckon that the third place in the constructors' championship probably cost them no less than $150m last year. So it's just as well their new cars were reported to be absolutely flying in testing last week at Valencia.
Wouldn't it be nice for Schweitzer in his retirement year if that goose could lay its golden egg?