Sayonara Schweitzer, bonjour Ghosn

PARIS – “An optimist sees an opportunity in every calamity, a pessimist sees a calamity in every opportunity,” said British Prime Minister Winston Churchill, the real-life hero of Louis Schweitzer.

On those terms, the new non-executive chairman of Renault is an absolute optimist. Learning from the calamity of Renault’s failed merger attempt with Sweden’s Volvo Car in 1993, Schweitzer spearheaded the best merger in the auto industry in the last decade, Renault’s alliance with Japan’s Nissan.

When he relinquished his CEO role at Renault last week, Schweitzer left a company radically different from the one he took over in 1992. Measured as a single entity, the Renault-Nissan group sold 5.8 million cars in 2004. That ranks it as the world’s No. 4 automaker behind General Motors, Toyota and Ford.

Formerly state-owned and French-focused, Renault now spans all continents, directly or through units Nissan, Samsung of South Korea and Dacia of Romania. In 2004, Renault was the most profitable among Europe’s volume carmakers.

Nothing predestined Schweitzer to run an automaker.

He was born and raised in the rarefied atmosphere of France’s elite-level civil service. In the 1960s, his father ran the International Monetary Fund.

He is related to philosopher Jean-Paul Sartre and Nobel Peace Prize winner Albert Schweitzer.

After finishing his education at the elite ENA graduate school for civil servants, Schweitzer in 1981 joined a socialist government that was determined to nationalize large swathes of the French economy.

Despite his role as the man who 15 years later privatized Renault, Schweitzer is unrepentant about the French socialist era.

“Many French industrial groups were ill run and needed new blood,” he says.

It was while he was chief assistant of industry minister Laurent Fabius that Schweitzer met a young and promising Michelin executive restructuring an ailing unit of the French tire maker. His name was Carlos Ghosn, the man Schweitzer was to hire in 1996 as his potential successor and who takes over today Renault’s reins.

In hindsight, the socialists’ defeat in 1986 became Schweitzer’s big opportunity. Forced to leave government service, he joined Renault. Six years later, he became the automaker’s chairman and managing director. He pursued negotiations for a merger with Volvo started by his predecessor Raymond Levy. But the plan fell apart. Volvo shareholders rebelled against merging with a company controlled by the French government while Volvo employees smarted at the perceived arrogance of their French counterparts.

Schweitzer says the split with Volvo is one of the worst memories of his life. But one of his best, he adds, came in 1999 when he learned Daimler-Benz had given up on bailing out Nissan, clearing the way for Renault.

Schweitzer did not forget what he had learned from the Volvo debacle. Renault worked to soothe Japanese hurt pride, galvanize the staff and prepare the way for Nissan’s recovery from near-bankruptcy.

Appointed by Schweitzer to head Nissan, Ghosn was the architect of that turnaround.

Today as planned, Ghosn becomes CEO of both Renault and Nissan. Schweitzer becomes non-executive chairman of the Renault board, a new title created for him. Symbolically, Ghosn gets Schweitzer’s old office overlooking the Seine. Schweitzer retains a secretary and an office in another building that was Renault headquarters in the 1930s.

Schweitzer says he plans a reduced role within Renault. His outside agenda reflects that. He chairs the board of Anglo-Swedish pharmaceutical company AstraZeneca.

He also heads the international department of MEDEF, the French bosses’ association. He will be the full-time boss of a newly created state agency to fight discrimination, chair the annual theatre festival of Avignon, and sit on the board of the Louvre museum.

What is heartbreak for most chief executives – ceding power – Schweitzer has turned into an opportunity to indulge his passions in politics and the arts.

It has not always been smooth in the Renault-Nissan alliance, says a newly published book on the Louis Schweitzer years at Renault.

In “Renault, Une Revolution Francaise” published by JC Lattes, Le Monde auto writer Stephane Lauer chronicles how Schweitzer transformed the company since taking over in 1992.

Lauer describes a Renault that wants closer integration and more synergies with Nissan, and an independent-minded Japanese automaker that tries to keep the French company at arm’s length.

“Schweitzer quickly came to realize that it was impossible for the French to stick their nose into Nissan’s engineering, the Japanese group’s Holy of the Holies,” Lauer writes.

Carlos Ghosn and the team of French executives that came to Tokyo in 1999 have often sided with their Japanese colleagues, frustrating their Renault counterparts.

“Whenever Renault comes along with a joint project, Ghosn invariably asks ‘What is in it for Nissan?’” Lauer adds. That creates a mood of frustration at Renault, where people feel “they have given a lot and received little in exchange,” he writes.

Schweitzer’s 2001 move to tighten control over Nissan and discourage potential hostile takeover bids startled Ghosn, the book says. Renault built a complex holding-company structure in the Netherlands and Nissan bought 15 percent of Renault while Renault boosted its stake in Nissan to 44 percent from 37.

At first, Ghosn could not understand spending money on Renault shares when Nissan still had so many rebuilding needs, Lauer says. But Schweitzer prevailed.

With both companies unified under Ghosn, such management disagreements may end.