Sergio Marchionne, the chain-smoking, deal-making boss of Fiat Chrysler Automobiles, was an unlikely auto government, spending a lot of his profession in different industries. But within the final 14 years, he has been a part of not one, however two turnarounds of carmakers.
On Saturday, Mr. Marchionne, 66, was abruptly changed. Fiat Chrysler revealed that he had change into gravely ailing since having shoulder surgical procedure on July 5. The firm named Mike Manley, 54, who’s the top of the automaker’s North America operations and its Jeep and Ram truck manufacturers, as Mr. Marchionne’s successor, efficient instantly.
Fiat Chrysler declined to offer particulars about Mr. Marchionne’s well being, however it made clear his situation had worsened considerably and abruptly.
“I am profoundly saddened to learn of Sergio’s state of health,” John Elkann, the grandson of Gianni Agnelli, the Fiat founder and chairman of the household’s funding firm, Exor, a serious Fiat Chrysler shareholder, mentioned in an announcement. “It is a situation that was unthinkable until a few hours ago, and one that leaves us all with a real sense of injustice. My first thoughts go to Sergio and his family.”
Mr. Marchionne had been scheduled to retire as head of Fiat Chrysler in 2019. He had deliberate to remain longer as chief government of Ferrari, the maker of sports activities automobiles that was spun out of Fiat Chrysler. On Saturday, Ferrari mentioned a board member, Louis Camilleri, would change into its new chief government.
Mike Jackson, chairman and chief government of AutoNation, the nation’s largest chain of auto dealerships, and a frequent visitor of Mr. Marchionne’s at Formula One races all over the world, mentioned he was “shocked and heartbroken” to listen to of Mr. Marchionne’s situation. He mentioned he final met with Mr. Marchionne in June, and his good friend gave the impression to be in good well being. “He was excited about stepping down from Fiat Chrysler and moving on to the next chapter,” Mr. Jackson mentioned.
Hired by the Agnellis in 2004, Mr. Marchionne revived Fiat at a time when few within the trade believed it may very well be saved. Then, when Chrysler was guided right into a government-led chapter in 2009, he supplied to take management of the corporate. With no different choice, the Treasury Department handed Chrysler to Fiat basically free of charge.
“Without Sergio, Chrysler would not have survived,” Mr. Jackson mentioned. “His negotiation with the Treasury was just masterful at a time of extreme stress. He’s a remarkable creator of value for companies, not just in the auto industry but any industry.”
When Mr. Marchionne took the helm at Fiat, the corporate had a market worth of about $7.5 billion. Today, the mixed market worth of Fiat Chrysler and Ferrari, which was spun out of Fiat Chrysler, is about 10 instances increased, at about $71.5 billion.
The turnaround of Chrysler has had missteps, nevertheless. Mr. Marchionne’s technique of reintroducing Fiat and Alfa Romeo automobiles within the United States has largely flopped. In current years, the corporate has been fined and investigated for its dealing with of recollects. And in 2017, the Justice Department sued Fiat Chrysler, alleging the corporate used unlawful engine software program to cheat on diesel emissions checks.
In most quarters, Fiat Chrysler makes nearly all of its revenue from Jeep and Ram vehicles, and the corporate is much less worthwhile than its Detroit rivals, General Motors and Ford Motor. Fiat Chrysler additionally lags in creating electrical autos and self-driving know-how of its personal, and in increasing in China, the world’s largest market.
Mr. Manley appears nicely positioned to deal with a few of these challenges. He has intensive expertise in China, having arrange the Jeep gross sales community there, and led the growth of Jeep to different markets all over the world, mentioned Tom LaSorda, who served as Chrysler’s chief government whereas the corporate was a part of DaimlerChrysler.
Under Mr. Manley, a soft-spoken native of Britain who joined the corporate in 2000, Fiat Chrysler will certainly see a transparent change in administration type from the flamboyant Mr. Marchionne.
“He’s stepping into big shoes, but Mike’s got great support and he’s a very likable guy,” Mr. LaSorda mentioned.
Throughout his tenure, Mr. Marchionne was a hands-on government.
After Fiat took management of Chrysler, Mr. Marchionne moved to Michigan and personally managed the corporate’s restoration and later the merger of the automakers. He typically sweated the engineering particulars of recent fashions and earned a popularity as a fiery taskmaster. He as soon as summarily fired two managers after Chrysler supplied beneficiant gross sales incentives Mr. Marchionne had not permitted of.
“He’s a legend,” Mr. LaSorda mentioned. “He’s in the very elite league of automotive C.E.O.s.”
Other high automotive chief executives who are sometimes in comparison with Mr. Marchionne for his or her achievements within the final 20 years embrace Carlos Ghosn, who created the alliance of Nissan and Renault; Alan Mulally, who rotated Ford; and Dieter Zetsche of Daimler AG.
Mr. Marchionne was born in Chieti, close to Italy’s Adriatic Coast, and moved together with his household to Toronto when he was 14. He later studied philosophy, accounting and regulation. He began his profession as a tax marketing consultant in Canada and have become an government at a Swiss metals-trading agency. He was chief government of SGS, a commerce providers agency, when he was employed to show round Fiat.
Almost instantly Mr. Marchionne proved himself to be a shrewd negotiator, forcing General Motors to pay Fiat $2 billion to exit their partnership.
While working Fiat, he confirmed up at an analyst assembly in 2006 sporting a black sweater and black denims. He determined he preferred by no means having to consider his wardrobe and has caught with that look since. He has mentioned he retains about 30 similar sweaters and pairs of denims in every of his houses in Michigan; Turin, Italy; and a mountain chalet exterior of Zurich.
He additionally likes to drive quick automobiles of his personal. In 2007, he was unhurt in a crash on a Swiss freeway whereas driving a Ferrari 599 GTB.
In 2015, he sent a lengthy email to Mary Barra, the chief government of G.M., proposing a merger of the businesses. Ms. Barra and the G.M. board declined to even supply to satisfy with Mr. Marchionne.
Not one to be postpone by rejection, Mr. Marchionne doubled down. About a month later, in a routine analyst convention name, he surprised the Wall Street analysts by devoting the dialogue to his sudden and intense attraction to automakers to merge. He known as his manifesto “Confessions of a Capital Junkie.”
“I think it is absolutely clear that the amount of capital waste that’s going on in this industry is something that certainly requires remedy,” he mentioned. “A remedy in our view is through consolidation.”
Rather than rally help, Mr. Marchionne’s attraction highlighted the difficulties forward for Fiat Chrysler.
More not too long ago he explored the opportunity of an alliance with a Chinese automaker, and pushed the corporate to slash its debt. In June, Fiat Chrysler revealed a five-year business plan that known as for the corporate to develop new traces of Jeeps and electrical autos.
One essential element, although, was not noted of the technique: the identify of his successor.