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French Pick Former Nuclear Official to Rescue Renault

July 11, 1985

PARIS (AP) _ The Socialist government’s choice to rescue the ailing state-owned auto giant Renault is the man who founded France’s highly regarded nuclear industry.

He is Georges Besse, often referred to in the French press as ″this Auvergnat,″ recalling his origins in the Auvergue district of central France.

Just before moving to Renault, Besse rescued the Pechiney aluminum group from massive losses in just two years.

His surgery for Renault already is clear - cuts of 21,000 from the 160,000 French work force; the sale of part or all of subsidiaries dealing in farm machinery, electronic, ceramic and other products, and concentration on the core activity of auto production.

The figures show the scale of the job Besse took on Jan. 27.

Renault’s 1983 losses of about $162 million, after a similar 1982 deficit, soared nearly 10-fold in 1984 to about $1.3 billion. That did not include the $650 million losses of its 46 percent subsidiary American Motors Corp. Renault’s overall indebtedness is around $4.2 billion.

Besse’s task is repeatedly compared to those of Lee Iacocca at Chrysler Corp. in the United States or Gianni Agnelli at Fiat in Italy. But where Iacocca does his own television commercials and Agnelli lectures on the future of the European auto industry, Besse talks little.

After five months running a key state company, long a symbol of enlightened labor policies and with a major stake in the U.S. auto industry, Besse has rarely met with journalists. His photograph is rarely seen in the media.

The Socialist-line newspaper Le Matin broke the story of the government’s ouster of his predecessor, Bernard Hanon, and Besse’s appointment.

Its capsule description of Georges Noel Besse - born Christmas day in 1927, the son of a Post Office worker - said he ″has guts and simplicity ... everything except high bourgeois origins, and thus no complexes about ’the class struggle.‴

Nor has he been reported to hold any complexes about nationalized industry.

″A great servant of the state,″ said the newspaper Le Monde of Paris, ″(Besse) believes in nationalizations but doesn’t make a religion of it. He has said there are not nationalized companies and others, but well-run companies and those which are not.″

Besse graduated second in his class from the elite Ecole Polytechnique, training ground of France’s top technocrats, and then did four years’ further study at the equally elite Ecole des Mines to become a mining engineer.

His working career started in 1954, literally at the bottom as an underground engineer in the coal fields of northern France.

But a year later he switched to the newest energy, joining the Atomic Energy Commission as No. 2 in the development of a uranium enrichment system. With the technology still a close secret in the United States, France had to develop the highly complex gaseous diffusion process alone. After three years, Besse was named director-general to build the Pierrelatte plant.

France could arm its own nuclear missiles and fuel the power stations that now provide nearly 50 percent of its electricity.

Pierrelatte is an enormous electricty consumer. It gave Besse the contacts to negotiate a crucial deal with the state electricity monopoly 25 years later for Pechiney’s power-hungry aluminum vats.

In 1964, Besse took his nuclear experience into private industry heading the nuclear division of ALCATEL, a major telecommunications company. He became president of the company itself and then assistant director-general when a merger created CIT-ALCATEL which supplies 40 percent of the French Post Office’s telephone switching and cable needs.

The state called him again in 1974 to build a new uranium plant to fuel Europe’s nuclear power stations, and in 1976 to run the Atomic Energy Commission’s COGEMA, covering the whole fuel cycle from manufacture to reprocessing spent fuel from worldwide clients.

In his one apparent setback, Besse was put in line to succeed Albin Chalandon as head of ELF-Aquitaine, France’s major petroleum company, but Chalandon outmaneuvered him and stayed in office.

Faced with the losses of newly nationalized Pechiney in 1982, the Socialist government of President Francois Mitterrand called for Besse.

He turned the 2.8 billion franc (then about $400 million) 1982 loss into a 1984 profit of some 500 million francs (about $55 million).

Besse got government approval to cede Pechiney’s heavily loss-making chemical division, ironically to ELF, and sealed the cheap electricity deal. He moved Pechiney out of the United States to Canada, again for cheaper power, and closed many of the company’s smaller French plants.

The job was largely accomplished.

When tapped for Renault, he became the first outsider to head the company since its foundation by the Renault brothers in 1898 and had no experience in the industry.

His first moves were symbolic, such as eliminating the pool of cars kept for loan to government ministries and other friends of the company.

One recent Renault success is the R-25 top executive model. Besse chose to drive its smallest car, the Superfive replacement of the R-5 ″Le Car,″ which, typically, was his previous, personal transport.

As he got to know Renault, he restructured top management and took personal control of the central car division.

The labor unions feared a drastic overall ″Besse Plan″ for the turn- round. There will be no such plan, the company now says, but continued step- by-step decisions announced at board meetings where the unions are repesented.

The low-key approach is typical of Besse and has the advantage of giving much smaller targets to Renault’s unions, long dominated by the Communist-led General Confederation of Labor. In keeping with his low profile, his official biography says he is married with five children, but gives no details of the family.

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