Renault Names Deputy for CEO Ghosn After Botched Spy Case

May 31, 2011, 5:39 AM EDT By Laurence Frost

(Adds analyst comment in third paragraph, shares in fifth)

May 31 (Bloomberg) -- Renault SA appointed Carlos Tavares as second-in-command to Chief Executive Officer Carlos Ghosn and will focus on developing factories in France, as the carmaker seeks to move past a botched spy investigation.

Tavares, 52, head of the Americas region for Renault affiliate Nissan Motor Co., will replace Chief Operating Officer Patrick Pelata, the Boulogne-Billancourt-based company said in a statement late yesterday. Pelata stepped down over his role in a probe in which three managers were wrongfully accused of espionage and fired.

“Tavares has good knowledge of both Renault and Nissan and should help Renault capitalize on the alliance,” London-based Credit Suisse analyst David Arnold said in an e-mailed comment. Tavares could “one day be seen as a potential successor for Carlos Ghosn.”

The French state, Renault’s biggest shareholder with a 15 percent stake, has said it wants Renault to take a clearer lead in the alliance with Yokohama, Japan-based Nissan, build cars in China and redouble efforts to develop upscale models for production in France. Ghosn, who also runs Nissan, has urged the government to improve the competitiveness of French car exports by reducing taxes on labor.

Renault rose as much as 77 cents, or 2 percent, to 39.56 euros and was up 1.9 percent as of 11:09 a.m. in Paris trading, paring the stock’s decline this year to 9.2 percent -- the worst performer on the 14-member STOXX 600 Automobiles and Parts Index.

Government Pressure

In connection with the appointment, Ghosn agreed under government pressure to devote more time to Renault, two people with knowledge of the matter said yesterday. They declined to be identified as the talks were private. The CEO had ceded daily operational oversight to Pelata in 2008.

Ghosn will be “more present in France” and personally oversee development of future upscale models and likely plant investments in China, he said in a Le Parisien interview today.

“Permanent improvement in competitiveness and the development of sites in France will be a priority,” Renault said yesterday.

As Ghosn increases his involvement at Renault, the No. 2 position will be slightly reduced from the operational command Pelata held, one person said, adding that details of Tavares’s responsibilities will be decided in the coming weeks.

U.S. Funding

Tavares joined Renault in 1981 after graduating from France’s Ecole Centrale and moved to Nissan in 2004 as program director for compact cars, rising to executive vice president the following year.

In his most recent role, Tavares, a Portuguese citizen, cut global manufacturing costs by expanding production in Mexico and bid successfully for $1.6 billion in U.S. Energy Department funding for an electric-car battery plant.

Nissan Chief Performance Officer Colin Dodge will replace Tavares as Americas chief, adding the region to his current responsibilities for Africa, the Middle East, India and Europe, the company said yesterday.

--With assistance from Alan Ohnsman in Los Angeles. Editors: Chris Reiter, Tom Lavell

To contact the reporter on this story: Laurence Frost in Paris at lfrost4@bloomberg.net

To contact the editor responsible for this story: Chad Thomas at cthomas16@bloomberg.net

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