Fiat Chrysler Automobiles Chairman John Elkann last summer was not kept informed on the health of a gravely ill Sergio Marchionne, just weeks before the CEO died, leaving a massive leadership void atop the automaker.
That's according to a new book, Sergio Marchionne, by Bloomberg's longtime Fiat beat reporter, Tommaso Ebhardt, and published in Italy.
Elkann, upon his first visit to see Marchionne in a Zurich hospital, was denied entry into the intensive-care unit because doctors said it would violate the patient's privacy. When Elkann visited the hospital three days later, on July 20, he met with Marchionne's partner, Manuela Battezzato.
“And, after speaking with her, [Elkann] came to the realization that his CEO was never coming back," according to a book excerpt released Tuesday by Bloomberg Businessweek on its website.
The excerpt offers numerous compelling details about Marchionne's legacy at the automaker and the void he left when he died on July 25.
“Although the exact nature of his illness hasn’t been officially released, Marchionne knew he was seriously sick a year before he died,” the book says. “In the weeks before he suddenly vanished into the hospital in Zurich, he appeared pale, swollen, and weak even as he worked his mobile phones, running his automotive empire. Everything went silent after he went into surgery on June 28.
“Only Battezzato and his closest relatives knew he was being hospitalized. Everyone else -- including Elkann, who’s Fiat’s controlling shareholder; the company’s top executives; and the board of directors -- was left in the dark.”
Elkann had been working with Marchionne on the automaker’s succession plans, but as of July 20, he knew he would have to make the decision without Marchionne. CFO Richard Palmer and Jeep boss Mike Manley emerged as the top picks and, according to the book, Palmer “took himself out of the race while Manley confirmed he wanted the job.”
Marchionne, as was often reported at the time, coveted a merger with General Motors and even called the potential deal Operation Cylinder. GM soundly rejected Marchionne's overtures, so he considered a hostile bid, but ran into U.S. pressure.
“In 2015, Marchionne had lined up initial commitments from European banks to finance a $60 billion cash offer for GM,” the book says. “But conditions weren’t right, as Elkann soon realized: It was too financially risky for indebted Fiat, and [GM CEO Mary] Barra had the backing of the U.S. establishment, along with top GM investors, including Warren Buffett. The Oracle of Omaha had discouraged Elkann, suggesting Barra should get her chance to run GM.”
Marchionne was frustrated.
“But he was realistic enough to admit in private conversations that the U.S. would never allow him to wage a battle to unseat the first female CEO of the country’s biggest carmaker,” Ebhardt wrote.
- Marchionne also considered pursuing a merger with Volkswagen's U.S. operations after the German automaker's U.S. emissions cheating scandal in 2015. He called it the Wulf Project, according to the book. The effort went nowhere.
- There were early discussions with French leaders about a potential merger with Peugeot, and Marchionne later was told Peugeot's new CEO, Carlos Tavares, was interested in discussing a deal. By then, Marchionne lost interest. Tavares denies making an offer to talk, the book says.
Bloomberg Businessweek said the excerpts were adapted from Sergio Marchionne by Tommaso Ebhardt, published in Italian by Sperling & Kupfer.