Fiat Chrysler Names Mike Manley to Replace CEO Sergio Marchionne

Posted on


Fiat Chrysler Automobiles NV named the head of its Jeep and Ram brands, Mike Manley, as chief executive officer to replace Sergio Marchionne, who was forced to relinquish the post after 14 years because of complications from shoulder surgery.

The abrupt departure of the executive who saved both Fiat and Chrysler and then forged a profitable trans-Atlantic operation will also require the selection of new leaders at Ferrari NV and CNH Industrial NV, according to people familiar with the matter who asked not to be named discussing confidential matters. Both companies were spun off from Fiat during Marchionne’s tenure.

Manley, a 54-year-old Briton, is the man behind the extraordinary success of the Jeep brand’s global expansion. He will start immediately, according to a company statement on Saturday. Manley joined Chrysler in the U.K. in 2000 when the carmaker was part of Daimler, and was named head of Jeep at the time of Fiat’s acquisition in 2009, leading the transformation of the iconic American brand into a cash machine. Analysts estimate that Jeep alone could be worth the entire $30 billion market value of Fiat Chrysler.

Marchionne’s health has “worsened significantly in recent hours,” and he will be unable to return to work, the company said. His illness accelerated the timeline for a decision on succession that was already seen as a crossroads for the company. Who would run the company was just the first of a number of pivotal choices — like whether to remain independent — facing Chairman John Elkann, heir to the founding Agnelli family.

Read More: A Timeline of Sergio Marchionne’s Transformative Fiat Chrysler Tenure

“I am profoundly saddened to learn of Sergio’s state of health,” Elkann said in a separate statement. “It is a situation that was unthinkable until a few hours ago, and one that leaves us all with a real sense of injustice.”

At the April general meeting, Elkann and Marchionne both said that Fiat Chrysler is now strong enough to survive by its own and doesn’t need a partner anymore. Fiat reiterated this view today. Manley and his team will proceed with the implementation of the 2018-2022 business plan as presented on 1 June this year, that will further assure FCA’s “strong and independent” future.

Passed Over

In choosing Manley, Fiat’s board passed over two other internal candidates — Alfredo Altavilla, a close aide to Marchionne and a Fiat veteran who’s overseen operations across the globe and now runs the automaker’s European business, and Chief Financial Officer Richard Palmer, who is well known to Wall Street and helped combine the company’s operations after the merger with Chrysler.

Manley had already been tasked with the biggest job of the five-year Fiat Chrysler plan unveiled by Marchionne on June 1: Doubling Jeep sales volume by 2022 from the 1.4 million vehicles sold last year. He needs to increase sales by 40 percent just this year to meet the 2018 marker of 2 million that Marchionne set out for Jeep.

Manley shares with Marchionne a very direct style and and a penchant for casual clothing. He has sidestepped the question of whether he was ready to take the top post, always saying he was fully concentrating on his Jeep job.

Rumpled Sweaters

Marchionne, known for his rumpled sweaters and nonstop work habits, was rivaled only by Renault-Nissan-Mitsubishi’s Carlos Ghosn for longevity as an automotive CEO. He was appointed in 2004 as the fifth Fiat chief in a two-year period. He managed to return the carmaker, which had lost more than 6 billion euros ($7 billion) in 2003, to profit in 2005 by cutting costs and laying off workers, and then looked for a partner.

With the acquisition of Chrysler in 2014, Marchionne gave Fiat the global scale needed to survive. Still, as the world’s seventh-largest automaker, the company may lack the size it needs to compete in an industry being reinvented by the emergence of autonomous driving and electrification.

Fiat Chrysler has been facing questions about Marchionne’s health for almost a month– his last public appearance was June 26, when he spoke at an event in Rome.The company said on July 5 that the CEO underwent an operation onhis right shoulder and was expected to require “a short period of convalescence.”

Filling his shoes won’t be easy. The executive is seen as one of the industry’s most skilled turnaround artists, not only saving Fiat from potential collapse, but later engineering its acquisition of Chrysler, which likely wouldn’t have received U.S. government backing for its 2009 bankruptcy without the involvement of its Italian partner.

Overnight Flights

Marchionne was known for seldom taking a break, often sleeping on the couch of his privatejet while traveling overnight among offices in Turin, Detroit and London. Weekend meetings were part of the routine for the executive, who preferred black sweaters to elegant suits so he didn’t have to waste time in the morning deciding what to wear. He drank volumes of espressos daily and was a chain smoker of Muratti cigarettes before quitting both about a year ago.

In recent months, he was preparing to slow down but wanted first to complete the five year plan to rid the carmaker of industrial debt, putting it in position to survive the next industry slump. “I am a fixer. Until something is definitively fixed, I can’t stop,” he has said.

Shaking Things Up

Marchionne has continued to shake up the industry with controversial moves that haven’talways endeared him to his counterparts. Chrysler stopped making most passengercars 2016 to focus on SUVs, a decision that has since been followed by FordMotor Co. and General Motors Co. In Europe, Marchionne moved away from mass production,transforming the Turin plant that churned out some 500,000 cars a year in the1970s to what will now be a niche producer of Alfa Romeo and Maserati SUVs.

He’s also focused on brand building, spinning off Ferrari into a separate trading company, a move that’s built enormous value for shareholders, especially the Agnelli family. Jeep, which produced about 300,000 cars in 2009, is now a global brand that will sell about 2 million vehicles this year after expanding in Europe, China, India and South America. The brand needs worldwide growth of more than 40 percent in 2018 to meet its goals.

Marchionne has been vocal for years on the industry’s need for more consolidation. His plan to create with General Motors the world biggest carmaker was rebuffed in 2015. Since then, He and Elkann decided to concentrate on the more lucrative SUVs and higher-margin brands.

‘No Script’

On June 1, Marchionne presented his last plan for the carmaker. His closingremarks were directed to his successor.

“The origins of FCA are a group of people from Fiat and Chrysler who faced the most difficult situations in the last 10 to 15 years. They confronted the threat of losing their dignity by losing their work,” Marchionne said. “Can Marchionne leave a script or instruction? The answer is that there is no script or instruction. FCA is a culture of leaders and employees that were born out of adversity and who operate without sheet music, that is the only way we know.”



Source link