Fiat have hands full searching for Marchionne’s successor

Fiat Chrysler Automobiles is widening its search for a successor for CEO Sergio Marchionne, with a group of second-tier managers joining company veterans on a growing list of candidates, according to people close to the discussions.

While Marchionne’s closest aides, including Europe chief Alfredo Altavilla and chief financial officer Richard Palmer, are under consideration to replace the CEO, the search has broadened to some younger candidates as the board casts a wide net, said the people, who asked not to be identified because the matter is private.

Executives from outside the company are not under consideration, the people said.

While Marchionne is set to stick around for about two years, succession has become a top priority for the board. It is a particularly complex issue as the long-time CEO holds unusually broad authority, directly involving himself in almost all strategic, operational and financing activities.

His approach is not likely to be replicated, with Fiat also considering overhauling its management structure to delegate powers to more executives, the people said.

Fiat and Exor, the holding company that controls the car maker, declined to comment.

“Replacing Marchionne is a monumental task for every internal heir,” said Giuseppe Berta, a professor of economic history at Milan’s Bocconi University and former head of Fiat’s archive. “The only way to succeed is to avoid imitating his strong leadership’s style.”

Marchionne transformed the once struggling Italian company through a series of deals, largely remaking it in his multinational image. He spearheaded the merger with US-based Chrysler to create the world’s seventhlargest car maker and reduced the company’s dependence on Italy by also shifting headquarters to London. He also spun off the Ferrari supercar brand and truck- and tractor-maker CNH Industrial. The companies, all controlled by the Agnelli industrial clan, are worth about €44bn, more than eight times Fiat’s value when he took over in 2004.

But Fiat still lacks the size and resources to tackle global giants like Volkswagen and Toyota Motor.

Marchionne’s efforts to tackle this weakness have come up empty. In 2015, he aggressively pursued a deal with General Motors, which was brusquely and repeatedly rejected. Earlier in 2017, he floated the idea of a potential offer from Volkswagen but backed off a few weeks later.

In addition to Palmer and Altavilla, the list of potential candidates for Marchionne’s roles, which also includes overseeing Fiat’s key North American operations include Jeep CEO Mike Manley; chief technology officer Harald Wester; Latin America boss Stefan Ketter; and Reid Bigland, head of US sales and the Maserati and Alfa Romeo brands.