Reasoning à la Marchionne

Not just since Luca di Montezemolo’s dismissal have arguments about the merits and demerits of FCA CEO, Sergio Marchionne’s style of conducting business been rather heated. And now we are being presented with a particularly poignant case in point.

Signore Marchionne undoubtedly knows his stuff when it comes to numbers and figures like few others in the business. Which is why nobody was surprised when he – somewhat proudly, it has to be said – explained that the series production Alfa Romeo 4C’s extremely ungainly headlights were his very own responsibility, as their decidedly cheap appearance helped lowering production costs by a few millions. Car buyers, he seemed to believe, don’t really care about details, even particularly blatant ones.

This was the most obvious proof yet that, following the Marchionne Principle, aesthetics must not come in the way of cost trimming. Hardly an enlightening revelation, but still quite a tangible symbol for the great sweater enthusiast’s ethos.

But irony, along with a few other things, is a dish best served cold. So, with some time having passed since the production 4C’s unveiling, we are treated to a particularly icy serving, as Marchionne’s Super Saver Lamp Units have all but disappeared from any 4C that has been lent to car journalists all over the globe recently.

Yes, the new headlights may be catering only to the US market, they may even be an expensive option that seemingly adds to Fiat’s bottom line. But that doesn’t distract from the fact that they will be an expensive amendment to the car’s production process, no matter how small scale it might be.

Marchionne’s lack of understanding of the market has, in fact, cost his company at least as much as he intended to save it in the first place. His penny-pinching ways have come to haunt him in particularly public style.

2013-alfa-romeo-4c-silber-genf-auto-salon-01

These two sets of headlights are now standing for Marchionne ad absurdum. Ferrari engineers and stylists better take note.

0162015_Alfa_Romeo_4c_USDM

6 thoughts on “Reasoning à la Marchionne”

  1. History should show what happens to the great cheapskates of automotive production. The UK industry was once blessed with innovators, but their numbers were exceeded by penny-pinchers who scuppered their plans with underinvestment at all levels. The US industry did the same to the few innovators who managed to get anything past product planning but, generally, it managed to knock out the same cart sprung car for half a century. The French innovated, but too much fell apart. Car makers forget how very expensive a car seems to most people. Sane people don’t actually buy new cars but the saner lunatics who do buy new want something that makes them feel good. Marchionne seems to think his cheapskate attitude is admirable, but he seems more like the self-deluded man who boasts of the savings he made by buying cheap furniture that only he doesn’t notice sags in the middle when laden with his home-brew beer kit (it tastes just the same you know!). FCA is beginning to feel like the shop you go into that has half empty shelves and staff who don’t really care if you shoplift – the next week it is boarded up.

  2. This reminds me of what happened to the Rover 75 later in its life. MGR needed to save money, so it set about replacing the more expensive (and attractive) components from the car with less expensive ones (e.g. leather covered gear knobs were replaced with cheap plastic ones) – or even not replacing them at all (those nice little satin-finish “torpedoes” at the bottom leading edge of the doors that gave the engine config on earlier examples, for example). What was nice, warm and luxurious-feeling interior became a rather less pleasant experience, what was a nicely detailed exterior was made pretty hideous post facelift. The lessons of history are there for FCA to learn …

  3. I’m struggling to buy this story somehow. First it seems to imply that the new units share no components with the base ones which I find hard to believe. Second, even if it is the case, would they really ‘millions’ to the ‘production process’? More than likely they are not developed by Fiat themselves but by one of the big parts manufacturers, and design, components and even tooling is unlikely to have been developed from scratch.

    All things considered, the only sure thing is that offering what everyone reckons should be fitted as standard as a chargeable option is the best way to make money in the automotive world. Just some manufacturers go about this in a more subtle way.

    1. The above should read: would they really ADD ‘millions’ to the ‘production process’…

    2. Whether you buy the story or not is not the main issue – the lack of business and/or PR acumen is.

      Marchionne boasting publicly about how the ugly headlights he pushed through helped save millions, only for a prettier version to arrive not that long after is simply embarrassing. Either he lied, and he could have had the more attractive lights available from the start at little or no extra cost, or he had to cough up the sum he thought he could save eventually. In any case, he should have kept quiet about those bloody headlights.

    3. I disagree. The comms might be clumsy but sometimes we give it too much importance i.e. overestimate its meaning or impact.
      Meanwhile there’s a very substantive question which I don’t remember seeing asked in the motoring press.

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