Sergio Marchionne, a charismatic and demanding CEO who engineered two long-shot corporate turnarounds to save both Fiat and Chrysler from near-certain failure, died on Wednesday. He was 66.
At Fiat Chrysler Automobiles headquarters in the Italian town of Turin, flags flew at half-mast, while in Rome the parliamentary committee for labour and finance observed a minute of silence.
Marchionne built the dysfunctional companies into the world’s seventh-largest car-maker, Fiat Chrysler Automobiles, almost by force of will, living on a corporate jet crossing the Atlantic to push staff to accomplish what most people thought impossible in a global recession.
Marchionne, who was Italian and Canadian, had revived Fiat by 2009 when he was picked by the US government to save US-based Chrysler from its trip through bankruptcy protection after being owned by a private equity company. “It’s highly unlikely that Chrysler would exist today had he not taken that gamble,” said Autotrader.com analyst Michelle Krebs. “The company was in such bad shape, being stripped of any kind of resources by the previous owners.”
Marchionne met most of his goals, even though at times he was doubted by nearly everyone in the car business. But he didn’t live long enough to complete his last two: personally hand over the reins of Fiat Chrysler Automobiles to a hand-picked protege and lay out plans for transforming supercar maker Ferrari.
The manager, known for his folksy, colourful turns of phrase and dark cashmere sweaters no matter the occasion, was the darling of the car analyst community. Even when expressing doubts at his audacious targets, they showed admiration for his adept deal-making. Thisincluded getting General Motors (GM) to pay $2 billion to sever ties with Fiat, key to relaunching the long-struggling Italian carmaker, and the deal with the US government to take Chrysler without a penny down in exchange for Fiat’s small-car technology. Marchionne joined Fiat after being tapped by founders the Agnelli family to save the company. Fiat had for generations been a family run enterprise, and having someone at the helm from outside Italy’s clubby management circles – even a dynamo like Marchionne – was an enormous change.
Other key corporate moves included the spin-off of the heavy industrial vehicle and truck maker CNH and the Ferrari supercar maker. Both deals unlocked considerable shareholder value for Agnelli family heirs led by John Elkann. Elkann, 42, came into his own under Marchionne’s stewardship, taking over as chairman in 2010 having been tapped more than a decade earlier by his grandfather, the late Gianni Agnelli, to run the family business.
As Marchionne’s health failed after surgery, Elkann delivered what amounted to an impromptu eulogy for a man he called his mentor. “He taught us to think differently and to have the courage to change, often in unconventional ways, always acting with a sense of responsibility for the companies and their people,” Elkann said.
It was Marchionne’s success in turning around a pair of Swiss businesses that drew the attention of the Agnelli family. He joined Fiat’s board in May 2003, four months after the death of Gianni Agnelli. He became CEO in June 2004, following the death of Gianni Agnelli’s brother, Umberto, Fiat’s chairman, leaving a family void in the company.
As an outsider, Marchionne was unfettered by local loyalties and set about cutting jobs and expenses, slimming management ranks and increasing shareholder value along the way. He brought in other outsiders to key positions and relaunched the iconic 500, which became one of the new Fiat’s calling cards as it expanded abroad. While he started small with limited industrial alliances, his ambitions soon grew. The bankruptcy of Chrysler gave him the opportunity to create a global car company with brands including Jeep, Ram, Alfa Romeo, Ferrari and Maserati that he envisioned would grow to 6 million cars a year. A global economic crisis that bottomed out car sales in key US and European markets prevented him from reaching that goal, but his industrial vision never faltered as he spun off CNH and Ferrari into stand-alone entities.
Marchionne had planned to step down as CEO of FCA after the close of 2018. He always insisted his successor would come from inside– so it was no surprise when British manager Mike Manley, who helped boost Jeep to global success and get Fiat a foothold in Asia, was named his successor as Marchionne’s health failed.
Marchionne’s penchant for numbers was always clear in his quarterly presentations. He let his real satisfaction show in June’s presentation when he announced the company had reached zero debt, by donning a tie for the first time in a decade – albeit briefly.
His next major move was to be the presentation of a new business plan in September for Ferrari, which he aimed to turn into a luxury company beyond just cars to further boost earnings.
At his last public appearance as CEO, in June, Marchionne attended a ceremony in Rome at which a Jeep was presented to the Carabinieri police. He noted that his father was a Carabinieri officer and he recognised in the Carabinieri “the same values at the basis of my own education: seriousness, honesty, sense of duty, discipline and spirit of service.”
Marchionne was divorced. He is survived by his companion, Manuela Battezzato, and two adult sons, Alessio and Tyler.