The Legacy of Sergio Marchionne

Sergio Marchionne was the executive who pulled two ailing carmakers from the brink of collapse and led the improbable transformation of Fiat Chrysler into an automotive giant.

Mr. Marchionne took over Fiat, in Turin, Italy, in 2004 and spearheaded the acquisition of Chrysler in 2009. On both occasions the businesses 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 Mr. Marchionne’s tenure, are worth nearly 10 times as much as they were when he took over.

An Italian-born Canadian, Mr. Marchionne had a reputation as a chain-smoking workaholic, 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 charged him with reversing its long decline. Acting quickly, he dismissed several executives, pared back production levels to meet demand and eliminated some slow-selling models.

Before long, Mr. Marchionne became closely watched as one of the fastest-moving chief executives in the auto industry.

His business acumen 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 G.M. to buy the Italian carmaker, a move G.M. had no desire to make. In a high-stakes game of corporate poker, Mr. Marchionne compelled G.M. 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.

His crowning achievement may have been his decision to drive a hard bargain for Chrysler in 2009.

As the Treasury Department in Washington hastened to prevent the collapse of much of the United States auto industry in the wake of the financial crisis, Mr. 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 Mr. Marchionne. But he knew that the Treasury, as well as Chrysler’s creditors and its labor union, had little room to negotiate. The American 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 Mr. Marchionne is revered in the halls of two headquarters, in Turin, Italy, and in Auburn Hills, Mich., north of Detroit.

He had planned to retire in 2019 before becoming critically ill as a result of his shoulder surgery on July 5th 2018. The company chose Mike Manley, the head of Fiat Chrysler’s North America operations and its Jeep and Ram truck brands, to succeed him.

FCD Summary

Sergio Marchionne died on July 25, 2018, at age 66, from complications related to underlying cancer.

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