Two had flown from Detroit: Chrysler LLC CEO Bob Nardelli and co-President Tom LaSorda. Their hosts at the September 2008 meeting: Fiat S.p.A.'s ultraintense (and utterly charming) CEO, Sergio Marchionne, and his perpetual-motion deal maker, Alfredo Altavilla.
Chrysler and Fiat had been discussing possible cooperation for 11 months, but with global auto sales in free fall, the two sides cut to the chase. At the meeting, the idea of Fiat taking effective control of Chrysler first took shape, and the man running the meeting was Marchionne.
The chain-smoking, 56-year-old architect of Fiat's stunning turnaround was in his element. Chrysler needed a partner to survive, and Marchionne understood that well.
On the surface, Marchionne had the hammer and Nardelli was the anvil. But Nardelli held two things Marchionne desperately wanted: access to North America and enough size to let Fiat survive the approaching storm.
Sweater guyThe Italian's informal style was well-suited to the Americans. Marchionne is not much on ceremony, and he hates neckties. For the past three years his business attire has consisted almost entirely of sweaters. At staff meetings, public speeches and industry events he's in a pullover instead of a business suit. The one exception: He donned a suit when appearing with Italian President Giorgio Napolitano.
In September, Nardelli was under pressure. The global economic crisis and U.S. vehicle sales meltdown had shattered Chrysler's turnaround plan. Analysts estimated Chrysler's monthly cash burn at $2 billion.
But Marchionne felt his own sense of urgency. The lawyer known for rescuing ailing corporations foresaw a global shakeout of mass-market automakers.
"Independence in this business is no longer sustainable," Marchionne told Automotive News Europe, a sister publication of Automotive News, on Nov. 8.
Marchionne predicted that only six mass-market automakers would be left worldwide within 24 months, and he shared some of his formula for survival.
"You need at least 5.5 million to 6 million cars [a year] to have a chance to make money," he said, adding that sharing platforms is more important than gross volume.
And with that logic, Fiat's CEO abandoned his longtime strategy of small deals in emerging markets as "too slow" for the new conditions.
Uncommon dealAltavilla, who is head of business development for Fiat Auto and CEO of Fiat Powertrain Technology, has crafted dozens of such deals since Marchionne took over.
The deals — whether licensing, joint production or shared products — have three common threads. They maximize use of Fiat technology, they minimize use of Fiat capital and management attention, and they avoid equity stakes.
But the Fiat-Chrysler deal that Altavilla and LaSorda hammered out between September and Jan. 13 was different. It calls for Fiat to get 35 percent of Chrysler in exchange for Fiat technology, and Fiat has an option to buy an additional 20 percent.
Marchionne wanted North American plants to build Fiats and Alfa Romeos and dealers to sell them. Chrysler had lots of unused capacity and 3,300 U.S. dealers. Chrysler needs fuel-efficient small-car platforms and powertrains — and a partner. The potential of the Fiat deal will play prominently in the viability plan Chrysler will present to the U.S. Treasury Department on Tuesday, Feb. 17, to prove it has a long-term future.
Like other Fiat deals in recent years, the Chrysler agreement leverages Fiat technology and products and requires no Fiat investment in Chrysler. But with an equity stake, it will take up a lot more of Marchionne's time.
Still, Marchionne always finds the time to tackle new tasks. It helps that he works seven days a week and only sleeps four hours a night.
That's how he keeps up with the five distinct jobs he has assigned himself at Fiat. He is CEO of Fiat S.p.A. and Fiat Auto. He is active as chairman of two other major Fiat units, truckmaker Iveco and Case New Holland, which makes agricultural and construction equipment. He handles CFO duties as well, right down to leading regular briefings of financial analysts.
That doesn't include his outside activities. At meetings, he places his three mobile phones — two BlackBerry devices and one Nokia — on the table in front of him. One phone is for Fiat S.p.A., one for Case New Holland and the third for UBS, the Swiss bank where he is nonexecutive vice chairman.
Marchionne gives his managers unusually broad authority. But he is quick to replace executives who disappoint him. Of the 30 or so key managers he installed when he took over at Fiat, a half-dozen were gone within six months.
"He puts a lot of stress on people," said Pierluigi Bellini, associate director of the Milan, Italy, office of Global Insight. "He's very intense in his way of life and in business."
Friday night flightsMarchionne, as the head of an automaker largely shut out of North America, is far less known on this side of the Atlantic than many European auto CEOs. But he knows North America well. He is a citizen of Italy and Canada, and he earned university degrees in Toronto and Windsor, Ontario. He spent a decade working in Canada before moving to Switzerland. He speaks English like a native, without a hint of an accent.
Marchionne spends several days each month in the United States, usually at the offices of Case New Holland in suburban Chicago.
Every other Friday evening, he leaves his Turin office for Sandro Pertini International Airport 10 miles away. He boards a chartered flight and flies through the night, snatching a few hours of sleep, and arrives Saturday morning in Chicago.
After two days of Case New Holland work, he catches the red-eye return flight Sunday. Early Monday morning at Sandro Pertini, an armored Maserati Quattroporte or other company vehicle is waiting for him, often taking him directly to his office in the five-story office building at Fiat's historic Lingotti complex.
For the Chrysler-Fiat deal to clear all the barriers, it will need a determined and energetic champion. Marchionne fits the bill. And he is convinced that Fiat and Chrysler together could be the core of the 5.5 million units of annual production he considers to be the minimum necessary to survive the industry's global crisis.
Bradford Wernle contributed to this report