THE architect of Fiat Chrysler Automobiles and the master of reviving ailing car companies, Sergio Marchionne, has died aged 66.
Mr Marchionne is credited with rescuing a crippled Fiat, taking on the role of CEO in 2004 just after it had posted a $US7 billion loss.
Fiat was then valued at $US6 billion. Last year, because of his drive, its valuation was $US60 billion.
Taking on the CEO role in 2004, he promptly sacked most of Fiat’s management and within 10 years, he merged Fiat with another ailing orphan, Chrysler, and took it to a Wall Street public listing.
In 2005, he drew the attention of global rivals when he untied an alliance between Fiat and General Motors and promptly asked GM for $US2 billion compensation. GM paid and Fiat’s bottom line bounced into the black.
Mr Marchionne then restructured the car businesses, pinning the future of the eclectic collection of brands and models on platform and component sharing, swapping badges and bodies while creating scales of economy that were unprecedented for a company with factories on both sides of the Atlantic.
Mr Marchionne was known for his forthright manner, characterised by the ability to mix light-hearted banter with cool and calculated business decisions.
The aficionado of Ferrari cars – he was CEO of Ferrari and took it to its public listing – and coffee and cigarettes, Marchionne was remembered as the jeans-and-sweater wearing company boss who defied dress convention.
He is remembered for an early conversation in Geneva with journalists in which he impressed with his easy-going manner and breadth of knowledge, single-minded ambition and yet an almost humble acknowledgement of his audience.
More recently, he established a five-year plan in June this year – the second for the Fiat Chrysler Automobiles – that places five brands on the mantle through to 2022.
It is this forward planning, and the rigid adoption of its rules, that often set Marchionne apart from his peers.
That baton for the plan has passed to Jeep and Ram boss, British-born Mike Manley, who becomes the first non-Italian CEO in the history of Fiat. Mr Manley was appointed late last week as Mr Marchionne struggled to recover from an operation on his right shoulder to remove cancer.
The cancer was invasive and led to Mr Marchionne falling into a coma. He died at the Zurich University hospital on Wednesday afternoon, Australia time, announced by Exor NV which is the holding company for the Agnelli family, the 119-year-old patriarchs of Fiat.
His death has precipitated a rash of appointments:
- FCA chairman John Elkann, grandson of Fiat scion Gianni Agnelli, becomes chairman of Ferrari.
- Ferrari appoints board member Louis Camilleri as CEO, replacing Marchionne.
- Jeep and Ram CEO Mike Manley adds the task of FCA CEO, replacing Marchionne.
- Alfredo Altavilla, COO of FCA Europe, resigns after missing out on getting Marchionne’s job.
FCA chairman and grandson of Fiat scion Gianni Agnelli, stated last night: “It is with the deepest sadness that (family company) Exor has learned of the passing of Sergio Marchionne.
“Unfortunately, what we feared has come to pass. Sergio Marchionne, man and friend, is gone. I believe that the best way to honor his memory is to build on the legacy he left us, continuing to develop the human values of responsibility and openness of which he was the most ardent champion.”
FCA shares this week fell 15 per cent on news of Marchionne’s illness and subsequent death and news from the company of a lowering of full year revenue and profit outlooks.
Mr Marchionne was born on June 17, 1952 in Chieti in central Italy and moved to Toronto with his family when he was aged 14. He studied to become a chartered accountant and attorney and worked for Deloitte & Touche in Canada before moving to packaging firm Lawson Group and then CEO of Lawson parent company, Swiss pharmaceutical company Alusuisse Lonza Group Ltd.
As CEO of ALG, he spun off Lonza which tripled its profits within three years. He then moved to Swiss product testing firm SGS SA which was owned by Fiat’s Agnelli family, leading to his career in the automotive industry and subsequent relationship with Fiat and the Agnelli family. Mr Marchionne is survived by his estranged wife Orlandina, two children Alessio and Jonathan, and partner Manuela Battezzato.
By Neil Dowling