Fiat Chrysler CEO’s exit hits its stock

MILAN — Fiat Chrysler shares were volatile Monday as investors expressed worry about the exit of ailing Chief Executive Officer Sergio Marchionne, whose driven and creative management style has been the company’s fortune.

Shares in the ItalianAmerican carmaker closed down 1.5 percent after a harder 4 percent opening tumble in the first trading since Marchionne’s grave health condition was disclosed over the weekend. Trading was volatile, particularly after news that the head of the big European operations, who had been considered one of Marchionne’s potential successors, was quitting. Ferrari, where Marchionne was also replaced at the helm, closed down about 5 percent.

The Fiat Chrysler board

on Saturday named longtime Jeep executive Mike Manley as CEO, unexpectedly accelerating a transition that was planned for early next year. The company said the 66-year-old Marchionne suffered complications from shoulder surgery in Zurich last month that worsened in recent days, and that he could not resume his duties.

The Italian news agency ANSA said he had been admitted to intensive care. The company said Sunday that it planned no statement on Marchionne’s condition.

The departure of Alfredo Altavilla, Fiat Chrysler chief operating officer for Europe, was confirmed Monday by the company in a statement. His exit deprives Manley of crucial management experience as he tries to steady the ship after the sudden loss of Marchionne, who had held the post for 14 years.

Altavilla, 54, was a close aide to Marchionne, having overseen Fiat Chrysler operations across the globe. He was considered one of the three leading candidates for the top job, along with Manley and Chief Financial Officer Richard Palmer. Manley was selected as the new CEO only

days ahead of the company’s Wednesday results presentation.

Altavilla’s resignation raises the stakes for when Manley addresses investors for the first time as CEO.

Marchionne will be a hard act to follow. Analysts credit his industry vision and ability to strike deals and take risks for increasing the market value of Fiat by tenfold since he took over in 2004. And while he was due to retire in 2019, most expected him to stay on in some role to guide the company.

“Some of us assumed he’d remain as chairman and be there to phone in his instructions,” said Max Warburton, an analyst at market research firm Bernstein who often publicly tussled with Marchionne on conference calls about the company’s earnings.

“Marchionne ran FCA in a command and control style, with constant firefighting measures. There is no operating manual to follow,” he said.

Marchionne engineered both the turnarounds of Italian carmaker Fiat and Chrysler, which Fiat acquired in 2009 in a deal with the U.S. government, creating the world’s seventh-largest carmaker out of two formerly dysfunctional entities. He created shareholder value for the

Fiat-founding Agnelli family with successful spinoffs of Fiat’s heavy-vehicle maker CNH Industrial and of the iconic Ferrari super sports car company. But his goal of another big merger failed to find any takers.

Marchionne proved himself a consummate deal-maker. He won control of Chrysler in a deal with U.S. President Barack Obama’s government without putting a penny down, only in exchange for bringing more small-car technology to Chrysler.

In May of 2011, less than two years after leaving bankruptcy, Marchionne pulled off a huge refinancing of the company’s $7.5 billion loan from the U.S. government, retiring it with a combination of corporate bonds, loans and payments, even though Chrysler had not yet turned an annual profit. Some of the debt carried at 12 percent interest rate and cost the company $1.2 billion in interest per year. The maneuver helped the company to start making money again.

The Italian-Canadian manager later demonstrated his agility by refocusing U.S. production on trucks and SUVs and away from passenger cars to meet market demand, a process that got underway in 2016.

And when President Donald

Trump took office, Marchionne quickly responded to his calls to keep jobs in America by repatriating production at a Mexican plant.

Manley, 54, has been key to transforming the quintessentially American Jeep brand into a global marquee since taking over there in 2009, and he also has been the head of the Ram truck division since 2015.

Both brands have formed the leading edge of Fiat Chrysler’s North American strategy to move away from passenger car production and focus on SUVs and trucks to meet market demand.

“Although Mr. Manley’s public profile has been relatively low and limited to operational matters, he was heavily involved in setting the 2019-22 strategic plan,” Philippe Houchois, an analyst at Jeffries Financial Services, said in a note. “We expect continuity.” But he also expressed concern that Fiat Chrysler’s success has been linked to Marchionne’s ability to shift strategy to meet targets.