Hard-charging auto CEO dies
Fiat Chrysler’s Marchionne known for reviving 2 carmakers
Sergio Marchionne, the executive who pulled two ailing carmakers from the brink of collapse and led the improbable transformation of Fiat Chrysler into an automotive giant, died Wednesday in Zurich. He was 66.
John Elkann, the chairman and chief executive of Exor, the holding company controlled by the Agnelli family, which founded Fiat in 1899, announced the death in a statement.
Marchionne had been incapacitated about three weeks ago by sudden complications of shoulder surgery, which he had undergone in Zurich. He was reportedly later put on life support. After Fiat Chrysler announced that he would be “unable to return to work,” the company hastily appointed a successor last weekend.
“Unfortunately, what we feared has come to pass,” Elkann said Wednesday. “Sergio Marchionne, man and friend, is gone.”
Marchionne took over Fiat, in Turin, Italy, in 2004 and spearheaded the acquisition of Chrysler in 2009. On both occasions, the companies were near low ebbs and few gave him any chance of success. But he defied those gloomy predictions. Today, Fiat Chrysler Automobiles and Ferrari, which was spun off during Marchionne’s tenure, are worth nearly 10 times as much as they were when he took over.
A confidant of his, Mike Jackson, chief executive of AutoNation, a large dealership chain, said Marchionne had an unusually analytical mind.
“He could take a fire hose of complexity and reduce it to its fundamentals in minutes,” Jackson said. “He had the courage to make very aggressive decisions and if it went badly, he’d be totally accountable for it.”
An Italian-born Canadian, Marchionne had a reputation as a chain-smoking workahol-
ic, one who forged his career as a tax consultant before moving on to a metals-trading firm and a trade services company.
His legacy was defined, however, by his work in the automotive industry. When he was hired by the Agnelli family to run the company, it was faltering and they gave him the task of reversing its long decline.
Acting quickly, he dismissed several executives, pared back production levels to meet demand and eliminated some slow-selling models.
He also had a quirky side. At news conferences, he entertained reporters with answers peppered with references to philosophers, pop music and ancient history. He once gave a commencement speech at the University of Toledo, in Ohio, that quoted Nelson Mandela and Albert Einstein while lauding the city’s long association with Fiat’s Jeep brand.
In 2006, he arrived at a meeting wearing a black sweater and black jeans. Deciding that he liked not having to think about his wardrobe, he stuck with that look for years. (He said he kept dozens of identical sweaters and pairs of jeans in each of his homes.)
Marchionne enjoyed driving his half-dozen Ferraris. “When you’re [angry], there’s nothing better than this,” he said, stomping on the accelerator of his black Enzo at the company’s test track in 2014 and pushing the car from a comfortable 120 mph to something over 200.
His business acumen also was repeatedly on display. Soon after becoming chief executive, he took advantage of an existing deal between General Motors and Fiat to attempt to force GM to buy the Italian carmaker, a move GM had no desire to make. In a high-stakes game of corporate poker, Marchionne compelled GM to pay Fiat $2 billion to end their alliance and used the money to develop new models, including the Fiat 500, a small car that became a hit in Europe.
But his decision to drive a hard bargain for Chrysler in 2009 may be the one that defined his career.
As the Treasury Department in Washington hastened to prevent the collapse of much of the U.S. auto industry in the wake of the financial crisis, Marchionne stepped forward with an audacious offer. Fiat would take control of Chrysler, the sickest of Detroit’s Big Three automakers, and provide cars and technology to revive it.
There was a catch, however: The government would have to hand Chrysler over to Fiat free of charge.
It was a hardball offer typical of Marchionne. But he knew that the Treasury Department, as well as Chrysler’s creditors and its labor union, had little room to negotiate. The U.S. economy was slipping deeper into recession, the collapse of Chrysler would have meant the loss of tens of thousands of jobs and no other company was willing to rescue it.
It was the beginning of one of the most remarkable rescues in the auto industry. Today Fiat Chrysler, while still facing challenges, is solidly profitable, and Marchionne is revered in the halls of two headquarters, in Turin, Italy, and in Auburn Hills, Mich., north of Detroit.
“I don’t care what a tough guy he was to work for, he saved our company,” said Cass Burch, a Chrysler and Jeep dealer in Georgia. “He deserves a bronze statue.”
Marchionne had planned to retire next year before becoming critically ill as a result of his shoulder surgery July 5.
The company chose Mike Manley, the head of Fiat Chrysler’s North America operations and its Jeep and Ram truck brands, to succeed him.
In June, at what would be his last public appearance as company chairman, Marchionne was in Rome for the presentation of a Jeep to Italy’s paramilitary police.
Marchionne, whose father was a member of the paramilitary police, extolled the values of “seriousness, honesty, sense of duty, discipline and spirit of service.”