In the U.S., the idea that the state should own major industries conjures up images of such titans of inefficiency as the Postal Service or British Steel. French Socialists cite a far different example: the Renault automobile company, which General Charles de Gaulle nationalized in 1945 to punish Founder-Owner Louis Renault for allegedly collaborating with the Nazi Occupation and which today stands out as one of France's most dynamic enterprises.
Renault is the world's fourth largest automotive firm.* It earned profits of $160 million last year, compared with a $349 million loss for privately owned rival Peugeot S.A. Well-heeled graduates of France's elite schools vie for jobs at Renault. So do assembly-line workers, whose tasks are made easier by an array of robots in some cases more sophisticated than those in Japan.
Renault's secret is that it is run like a private company. The government provides about 10% of the financing, but it does not meddle in such decisions as the choice of car models. "We tell them what we are doing, at which point they can agree or disagree," Renault Executive Francois Doubin explains. "But I can't remember a single disagreement in my 16 years with the company."
One reason the government has allowed Renault such leeway is that it must face competition on the world market. Notes one Renault executive: "I doubt that a purely domestic company would have enjoyed the same benign neglect."
Critics of Mitterrand's nationalization program claim that Renault is a special—and lucky—case. First, unlike many of the firms that the government now plans to take over, Renault was making money when it was nationalized.
Second, nearly 25% of the company's sales come from one model, the small and nimble R5 (dubbed "Le Car" in the U.S.). Says one foreign banker: "When you look at the rest of the company, it isn't doing so well."
Still, Renault's engineers are highly respected in the industry. A fortnight ago, to the raves of European auto writers, the company unveiled its newest model, the four-door R9 sedan. Roomier and posher than the R5, it will be manufactured not only in France but also at an American Motors factory in Kenosha, Wis., starting next year.
"The top three: General Motors, Ford and Fiat.