FIAT CHRYSLER CEO SERGIO MARCHIONNE DEAD AT 66
Normally, our blog space is reserved for news related to the collector car industry yet this news story, I believe, merits inclusion. Had Sergio Marchionne not taken the helm of Chrysler at a perilous moment, the brand today may well have gone the way of Oldsmobile.
The following courtesy of The Wall Street Journal and author Chester Dawson with Mike Colias and Eric Sylvers.
Sergio Marchionne, who engineered a merger of the auto industry’s weakest companies—Fiat and Chrysler—and turned the combination into a cash-generating machine, died at the age of 66.
Mr. Marchionne was treated at Zurich’s University Hospital for complications after undergoing what Fiat Chrysler Automobiles NV said was a surgical procedure on his right shoulder in July. The health issues forced the company to unexpectedly remove him as CEO on Saturday, speeding up a departure planned for early 2019 after a decade at the helm of the Italian-American auto maker.
Exor SpA, the company that controls Fiat Chrysler, on Wednesday announced Mr. Marchionne’s death.
While less known among the general public than predecessors such as Lee Iacocca, Mr. Marchionne was a star in the auto industry, and his death marks an end of an era in Detroit where he was one of the last larger-than-life CEOs. He relished challenging auto industry orthodoxy, and was ahead of rivals on some key automotive trends.
Born in Chieti near Italy’s Adriatic coast on June 17, 1952, Mr. Marchionne moved with his parents to the Toronto area in 1966, according to Mondo Agnelli, a book about Fiat’s deal for Chrysler. Mr. Marchionne went to university and law school in Canada, where he later worked for Deloitte & Touche. In the 1980s, he made his way back to Europe, taking a series of increasingly high-level jobs at several industrial companies based in Switzerland.
Mr. Marchionne joined the board of Fiat in 2003 as head of Geneva-based SGS Group , then partly owned by the auto maker’s founding family. The following year he was vaulted into the CEO’s job at Fiat to fill a leadership vacuum at the top.
His restructuring of the problem-plagued Italian auto maker was helped by a $2 billion deal he struck with General Motors Co. in 2005, which allowed the American giant to exit a contract negotiated five years earlier that would have forced it to buy the 80% of Fiat’s car business it didn’t already own.
By the 2008 financial crisis, Chrysler LLC’s then-owner Cerberus Capital Management was looking to sell, and Mr. Marchionne was ready for the deal that would define his career. Underwritten by nearly $8 billion in loans from the U.S. and Canadian governments, Fiat took control of Chrysler after it filed for bankruptcy protection and wasted little time pushing out longtime executives, closing dealerships and reimagining its lineup.
Instead of taking an office in an imposing tower for senior management on the campus of Chrysler’s headquarters in Auburn Hills, Mich., he set up his desk on the fourth floor of the adjoining technology center. He set a grueling seven-days-a-week pace, flying back and forth between Italy and the U.S. on a private plane.
A self-described workaholic, Mr. Marchionne carried a stack of up to five smartphones and wore a black sweater and jeans daily, even when visiting dignitaries and leaders such as President Donald Trump. Mr. Marchionne kept about 30 sweaters and pairs of jeans in each of his homes in Michigan, Turin and Switzerland, allowing him to travel with minimal luggage. “I have identical clothes everywhere I live. Down to the socks,” he said in a 2011 interview.
He also was known to gulp down espressos and chain-smoke Muratti brand cigarettes, a habit company officials say he gave up about a year ago. Mr. Marchionne loved playing poker on his trans-Atlantic flights, according to company officials, and he wasn’t afraid to fold early when dealt a losing hand—at the card table, or when assessing corporate strategy.
His initial plan to import Fiat models to the U.S. and use its small-car technology on Chrysler vehicles was one such example. As part of the bailout agreement with the U.S., Fiat agreed to build an American-made compact capable of getting 40 miles per gallon. But that car—the Dodge Dart—was a poor seller, an early indication U.S. consumers were moving away from sedans and into larger vehicles.
Mr. Marchionne canceled nearly all of Fiat Chrysler’s sedans for the U.S. market—including the Dart and Chrysler 200 models—and moved aggressively to retool U.S. factories to ramp up production of Jeep sport-utility vehicles and Ram pickup trucks which commanded premium prices. That move was later mimicked by Ford Motor Co. , which this spring said it would phase out nearly all U.S. sedans. General Motors Co. is expected to pare its sedan lineup as well.
A longtime proponent of auto-industry consolidation, Mr. Marchionne made waves among peers in 2015 with a 25-page PowerPoint manifesto titled “Confessions of a Capital Junkie.” In it, the CEO chided the car industry’s “value-destroying addiction to capital,” with charts and graphs showing the industry as a laggard in enterprise value and return on invested capital compared with other sectors. He challenged his fellow auto makers to consider consolidation to unlock stronger shareholder returns.
Many auto executives agreed with the unflinching assessment of their industry, but so