One Of Automotive’s Most Successful CEOs Just Quit The Entire Car Industry

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.

Per Automotive News:

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