Can Renault Get Out Of This Ditch?

Profits are plunging--and murmurs of a merger are back

In Europe's painful march toward competitiveness, French auto maker Renault has offered a beacon of hope. Close to collapse in the 1980s, state-owned Renault went through a cost-and-quality revolution, fended off Japanese newcomers, and became one of Europe's most profitable carmakers by the early 1990s. Memory of the "Renault miracle" makes the current news from the company especially chilling--and sends a strong warning to Europe that corporate turnarounds can be fragile.

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