Fiat Chrysler Automobiles now must face the premature end of the Sergio Marchionne era.
Mike Manley on Saturday was named to replace Marchionne at the FCA helm.
Marchionne turned around an ailing Fiat when he took over more than a decade ago, and he’s been closely tied to the company’s success.
Marchionne, 66, known for his rumpled sweaters and nonstop work habits, was one of the longest serving CEOs in the auto industry. He was appointed in 2004 as the fifth Fiat chief in a two-year period. He returned the carmaker, which had lost more than 6 billion euros in 2003, to profit in 2005 by cutting costs and laying off workers, and then looked for a partner.
With the acquisition of Chrysler in 2014, completing a five-year process, he gave Fiat the global scale needed to survive. Still, as the world’s seventh-largest automaker, the company may lack the size it needs to compete in an industry being reinvented by the emergence of autonomous driving and electrification.
FCA has faced questions about Marchionne’s health for almost a month. His last public appearance was June 26, when he spoke at an event in Rome. The company said on July 5 that the CEO underwent an operation on his right shoulder and was expected to require “a short period of convalescence.”
Filling his shoes won’t be easy. The executive is seen as one of the industry’s most skilled turnaround artists, not only saving Fiat from potential collapse, but later engineering its acquisition of Chrysler, which likely wouldn’t have received U.S. government backing for its 2009 bankruptcy without the involvement of its Italian partner.
Marchionne is known for seldom taking a break, often sleeping on the couch of his private jet while traveling overnight among Turin, Detroit and London, the three homes of the automotive group. Weekend meetings were an ordinary routine for the executive, who favored black sweaters to elegant suits so he didn’t have to waste time in the morning deciding what to wear. He drank volumes of espressos daily and was a chain smoker before quitting both about a year ago.
In recent months, he was preparing to slow down but wanted first to complete the five-year plan to rid the carmaker of industrial debt, making it financially stronger and able to survive the next downturn. "I am a fixer. Until something is definitively fixed, I can’t stop," he has said.
Shaking things up
Marchionne has continued to shake up the industry with controversial moves that haven’t always endeared him to his counterparts. Chrysler stopped making most cars 2016 to focus on light trucks, a decision that has since been followed by Ford Motor Co. In Europe, Marchionne has moved away from mass-car production, transforming the Turin plant that churned out some 500,000 cars a year in the 1960s to what will now be a niche producer of Alfa Romeo and Maserati crossovers and SUVs.
As recently as March, at the Geneva auto show, Marchionne was among the executives who refused to go along with a proposal by German rivals to issue a statement reiterating the industry’s commitment to diesel technology. “They didn’t get support from the others and were left by themselves,” he said then.
He’s also focused on brand building, spinning off Ferrari into a separate trading company, a move that has built enormous value for the Agnelli family and other shareholders. Jeep, which produced about 300,000 vehicles in 2009, is now a global brand that will sell about 2 million vehicles this year after expanding in Europe, China, India and South America.
FCA and Ferrari share a controlling shareholder in Exor, the holding company run by Chairman John Elkann. Exor also controls CNH Industrial, the truck and tractor maker where Marchionne is chairman.
CNH Industrial’s board is also expected to meet Saturday to name a replacement for Marchionne, the people said. Representatives for FCA and Ferrari declined to comment, while a representative for CNH Industrial wasn’t immediately available.
Ferrari will name Camilleri its CEO, Automotive News reported on Friday, citing a source familiar with the decision.
FCA earlier Friday denied a report by the website Lettera43.it that Elkann would convene top managers in Turin on Saturday to discuss how to temporarily redistribute his powers. The company’s Milan-listed shares finished down 2.3 percent.
On Wall Street, FCA shares have been stable all week. They fell 1 percent to close at $19.32 on Friday.
The Italian-American automaker is scheduled to report second-quarter earnings on July 25. Palmer -- seen by some investors as the top contender for the CEO job -- probably will lead the conference call, people familiar with the matter said earlier.
Marchionne has been vocal for years on the industry’s need for more consolidation. His plan to create with General Motors the world biggest carmaker was rebuffed in 2015. Since then, he and Elkann decided to concentrate on the more lucrative crossovers and SUVs and higher-margin brands.
“This business, if you really want to do it well, is all-consuming,” the CEO said in an interview with Bloomberg News in Detroit in January. “I am tired. I want to do something else.”
On June 1, Marchionne presented his last plan for the carmaker. His closing remarks were directed to his successor.
“The origins of FCA are a group of people from Fiat and Chrysler who faced the most difficult situations in the last 10 to 15 years. They confronted the threat of losing their dignity by losing their work," Marchionne said.
"Can Marchionne leave a script or instruction? The answer is that there is no script or instruction. FCA is a culture of leaders and employees that were born out of adversity and who operate without sheet music. That is the only way we know.”
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