Sergio Marchionne, head of Fiat since 2004 and Chrysler from 2009, has passed away aged 66 after complications arising from surgery.
Known for his straight-talking style, workaholic lifestyle, and love of black wooly sweaters, Marchionne was not a noted "car guy", but his legacy includes turning around not one, but two automakers. He is survived by his partner Manuela Battezzato, and his sons Alessio and Tyler.
Born in Italy in 1952, Sergio Marchionne moved with his family to Canada when he was 13. He has degrees in business and law, is fluent in three languages (Italian, English and French), and is a certified accountant. Indeed, he spent the early years of his working life as a practicing accountant.
He joined the board of the Fiat group as an independent director in 2003, and was appointed as the chief of Fiat Auto in 2004. His appointment raised some eyebrows given his lack of experience in the automotive sector, but he his work in turning around SGS, a Switzerland-based testing and certification company, convinced Fiat to give him a shot.
Fiat Auto was swimming in red ink at the time, and had been through a succession of high-profile CEOs. Marchionne is widely credited with bringing the company back into the black by 2006 and pushing the retro 500, based on the 2004 Trepiuno concept, through to production.
Above: Fiat 500, launched in 2007, still going strong.
Not only did the 500 see the return of a classic name and place an upmarket twist on the city car format, it was built on the same platform – and in the same Polish factory – as the second-generation Ford Ka. That's an intriguing development, given Fiat's partnership with cross-town rival General Motors.
That alliance dated back to 2000, when the two companies sought to share development costs and turn around their flagging European fortunes. GM took a 20 per cent stake in Fiat as part of the deal, with Fiat in turn holding 6.0 per cent of GM.
As part of the alliance, Fiat had a "put" option where it could force GM to acquire the Italian automaker any time between January 2004 and July 2009.
By 2005, this looked to be a fantastic deal for loss-making Fiat, but nothing short of awful for the General, which was struggling to stem constant losses from Opel/Vauxhall and Saab.
In exchange for removing this poison pill, General Motors paid Fiat US$2 billion ($2.7 billion). A large sum, but arguably much less than the cost of taking over and integrating an Italian patient.
Above: Chrysler Sebring, not one of DaimlerChrysler's finest moments.
Marchionne's second big windfall came with the Global Financial Crisis of 2007.
Although all automakers suffered through this period, America's Big Three, reliant on large SUVs and pickup trucks, and weighed down by deals made in the good times, were struck particularly hard. By 2008 both General Motors and Chrysler had filed for Chapter 11 bankruptcy protection.
With the backing of the recently-elected Obama administration, as well as unions and the Canadian government, GM emerged a healthier, still-independent company.
As the smallest of the Big Three, Chrysler needed a hand – and that's where Fiat stepped in. By promising its platforms and engineering expertise, Fiat was given a 20 per cent share in Chrysler without having to put in any cash, and Marchionne soon added the title of Chrysler CEO to his list of responsibilities.
Fiat grew its stake in Chrysler over time, before completing a buyout and forming Fiat Chrysler in 2014.
Thanks to 11 years of poor decisions, first as part of the DaimlerChrysler "merger of equals" and then under the management of private equity fund Cerberus, Chrysler was saddled with a decrepit range of thirsty, poorly built cars with some of the worst interiors since dinosaurs roamed the Earth.
Marchionne ordered hurried redesigns and new interiors for many models, but the first new product based on Fiat platforms didn't appear until the Dodge Dart and Jeep Cherokee were launched in 2013, followed by the Chrysler 200 in 2014.
Above: Jeep Cherokee - controversial, but profitable.
Jeep is the word
As when Chrysler bought American Motor Corporation (AMC) in 1988, the main prize for Fiat was Jeep. Given the global shift away from sedans, hatches, wagons and coupes into crossovers, the timing has worked out exceptionally well for Fiat Chrysler.
Under Marchionne and current Jeep chief and acting FCA CEO Mike Manley, the American off-road brand has aggressively targeted markets outside of the USA, expanded its range to include the city-friendly Renegade, and replaced every model except the Grand Cherokee. Sales have since jumped from around 320,000 in 2009, to a predicted 1.9 million this year.
With sales of the 200 and Dart slow and heavily reliant on incentives, Marchionne axed the two still-young models in 2016 to concentrate the company's development dollars and factory space on crossovers, pickup trucks, and luxury cars.
Above: Chrysler 200, a bit too coupe-like for Marchionne.
Controversies, missteps and promises
With an outspoken nature and hands-on management style, Marchionne wasn't immune to criticism. In 2011, he referred to the US government as a "shyster", a word seen as highly derogatory by the Jewish community, for giving Chrysler high-interest loans during its bankruptcy proceedings.
He has also opened criticised his own company's products, once describing the Jeep Commander (which ceased production in 2010) as "unfit for human consumption".
He told consumers, "I hope you don't buy [electric Fiat 500e], because every time I sell one it costs me US$14,000" in 2014, too.
Speaking with Automotive News and other outlets, Marchionne said his designers were "dummies" and blamed the failure of the Chrysler 200 on its sloping roof and poor entry/egress for rear-seat passengers.
"Some people from design left some of their private parts on the table after we came up with that determination," he noted.
The company has also had to deal with its own diesel emissions "defeat device" controversy, and issue revised sales figures in the US in 2016.
Above: Lancia Delta, which may have been turned into the Chrysler 100.
Unlike almost every other carmaker, Fiat Chrysler has been very upfront about its future plans, releasing regular five-year plans and updates – most likely to prop up shareholder morale.
Unfortunately, the company has tended to over promise and under deliver. The multi-billion dollar makeover of Alfa Romeo was meant to have yielded an eight model lineup by now, but so far we've only seen the Giulia sedan and Stelvio crossover.
The promised 100 small car and two crossovers have yet to appear in Chrysler's range, making the brand a people mover company. Dodge will keep infusing its rear-wheel drive performance-oriented models with more and more power, but a new platform is a long way off in the distance.
Fiat has slimmed its focus to the 500 and Panda, along with their various offshoots. And Lancia? Well it and the Ypsilon still exist, barely. Ferrari was spun off and partially floated on the New York stock exchange in 2015.
What the future might hold
Thanks to the company's laser focus on paying down its debt — once one of the highest in the industry — FCA is scheduled to become debt-free by 2019.
Despite posting solid profits over the last few years, there are plenty of challenges on the company's horizon. Most of its vehicles rely on underpinnings dating to 2010 or earlier, and it's only now wading into the electrification game. Its first plug-in hybrid model, the Chrysler Pacifica, has secured a partnership with Waymo, which is a step in the right direction.
Just as importantly, FCA is heavily reliant on the Jeep and RAM brands for much of its profit. If we were to enter another global recession, or consumer tastes were to shift back towards traditional body styles, it's not clear how the company would fare.
Marchionne acknowledged the precarious nature of his company's success when he gave a presentation titled "Confessions of a Capital Junkie" in 2015. In it he argued for further automotive consolidation given the industry's high costs and low margins.
Going a step further he courted General Motors publicly and privately for a merger. Although this came to nought, talk of a takeover has persisted, with the most recent rumours suggesting Great Wall or Hyundai are interested.
At the launch of the company's most recent five-year plan in June this year, Marchionne told reporters, “we fully understand that processes and procedures are important, at FCA we are, and always will be, about the music.
“Our approach will be different. Improvisational. Agile. Open to debate. And fearless, born out of humility. We will always be a culture where mediocrity is never, ever worth the trip.”
It will be interesting to find out how good Manley's improvisational skills are, and what tune the company will be singing in a few years.
Leaders from the automotive industry have taken to social media to commemorate Marchionne's life.
"The auto industry has lost a real giant. And many of us have lost a very dear friend: Sergio Marchionne," Dieter Zetsche, head of Daimler, posted on LinkedIn.
Mary Barra, the GM CEO who once refuted Marchionne's merger overtures, said on Twitter: "We at General Motors offer our condolences to Sergio Marchionne’s family and friends. Sergio created a remarkable legacy in the automotive industry. Our thoughts are also with our industry colleagues at Fiat Chrysler as they deal with this sudden loss."
"Sergio Marchionne was one of the most respected leaders in the industry whose creativity and bold determination helped to restore Chrysler to financial health and grow Fiat Chrysler into a profitable global automaker.
"His extraordinary leadership, candor and passion for the industry will be missed by everyone who knew him. Our thoughts and prayers go out to his family at this difficult time," Bill Ford, Ford Motor Company's chairman, said in a statement.
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