The Circle Game

The Arese merry-go-round has a fresh face in new CEO, Tim Kuniskis. Will he enjoy better fortune than his predecessors, or will it simply be more of the same?

Tim Kuniskis. Image credit: thenewswheel

Who’d take on a basket-case like Alfa Romeo? A marque with almost boundless potential for greatness, yet equally one with an unimpeachable aptitude for tragi-comic reversals of fortune. A state of affairs which is rooted in successive management failures – from those amid the semi-state Istituto per la Ricostruzione Industriale who oversaw Alfa’s affairs until 1987 and subsequently, the individuals Fiat Auto appointed to guide its fortunes.

Not that all must bear equal blame. As recounted on these pages, some managers arrived at Arese with the skill, the enthusiasm and the track record, yet could not make their case to Fiat’s masters or successfully navigate the Curia-like corridors of power in Turin. So to a historic failure to manage, one must also add the scourge of politics.

The sheer number of Alfa Romeo CEO’s since the 1990’s seems as bewildering to the casual reader as it must have been for Arese’s employees, because as with any revolving door scenario, getting decisions made at all is often as difficult as making them well. So it’s dispiriting to note that even now, some traditions remain alive and well.

Looking at the time-line from an immediate post-millennial perspective, Alfa Romeo was lead by Daniele Bandiera. Allegedly sacked in 2004 for failing to meet targets, he was replaced by former BMW M-Division chief, Karl-Heinz Kalbfell. A little over a year later, before he could make any meaningful contribution, his Alfa remit was summarily handed to Antonio Baravelle, who himself abruptly resigned and left the motor industry in 2007. His place was taken by former marketing chief, Luca de Meo who defected two years later for the VW group.

Keeping up? Good. De Meo was succeeded by Harald Wester in 2010, a long-time Fiat exec who oversaw the development of the Giulia and Stelvio models, before being shunted sideways in a 2016 FCA reshuffle. His replacement was Reid Bigland, the Head of US sales for the FCA Group, a role he continued to lead alongside his Alfa and Maserati remit. This was the state of affairs until earlier this year when Bigland’s purview was downsized with the Italian brand responsibilities being given to former Dodge CEO, Tim Kuniskis. And so the merry go round spins.

Image credit: carscoops

With FCA now a multinational business, albeit one with a marked US focus and accent, Italians no longer direct the course of some of their most storied names. Does this matter? Of course not, the only thing that matters is competence – that, and clarity of purpose. One which assumes those who lead Alfa Romeo understand the marque, have a robust strategy for the business and are prepared to agitate for the investment it requires to be competitive.

What a revolving door policy tends to engender however, is a culture where those who assume the top positions are more akin to government ministers, with limited time to get on top of their brief and painfully aware that short-term gains are what is required to keep them in an upward trajectory within the organisation. Brand fealty is for the birds.

How much time Kuniskis will have in his current role is currently anyone’s guess and given the current state of affairs for both Alfa and Maserati, a viable strategy for both; one which isn’t likely to be chopped and changed on the whim of a Chairman more interested in securing his legacy, is vital if they are to prosper.

Furthermore, the requirements for both marques are subtly different, yet both are vying for the same finite pot of investment funding. So is it logical or even practicable for one man to successfully and impartially manage both nameplates?

Given this state of affairs, what is to be done? Can Kuniskis not only get a grip on Alfa Romeo, but propel it towards being a sustainable (and heaven help us), profitable car business? Does he have the will and the managerial nous to convince his mercurial boss that the only way for Alfa to succeed is for it to be adequately funded and for radical changes in ethos, execution, customer care and product to take place.

It seems unlikely. FCA’s leader has broader vistas and larger mountains to  conquer. Avowed to eliminate nearly $3 billion of the carmaker’s debt burden by June, Marchionne’s goal is to go out with a bang. Speculation has reignited that he’s working on a merger deal with another automaker, with some analysts even speculating that Ford could ultimately succumb to Sergio’s woolly embrace. Now that really would be ironic, Alanis.

Image: caradvice.com.au

There are of course those who believe Marchionne’s intention had always been to offload Alfa Romeo; the idea being to rush the Giulia and Stelvio into production, and with volumes climbing rapidly, make a quick sale to Dr. Piëch at a hefty premium. Then came VW’s diesel-related schisms and China’s nosedive. Timing after all being as important as good fortune.

Wild speculation of course, but with Sergio, one can never be certain of anything. Even his much signposted departure to take up knitting or whatever superannuated automotive moguls do in their retirement is open to question with some commentators suggesting last week that he won’t relinquish the tiller at all.

One thing upon which we can be reasonably confident however is that a deal of some nature will be struck. Marchionne will not rest (or depart) until one has been achieved.

For Kuniskis, the future appears both uncertain, yet equally clear. Most likely another disposable acolyte who will continue Alfa Romeo’s precarious holding pattern until the deal of the century is struck by the Italo-Canadian maestro. Meanwhile, the seasons go round and while the painted ponies rise and fall, the fabled Biscione remains captive on the carousel.

 

Author: Eóin Doyle

Founding Editor. Content Provider.

20 thoughts on “The Circle Game”

  1. Golly: what did Wester do wrong? Or did he simply tire of the task? AR is so reminiscent of Italy, isn’t it? A new leader every 23 months. The directors barely last a third of a model cycle. That’s no recipe for continuity. One effect is people who invest in an idea get demoralised to see it canned by the next leader or see agreements torn up mid-way through development.
    I saw a Stinger on Saturday. It is a good-looking car, like 3 series used to be. It’ll be developed and replaced by something even better in 2024. The Giulia will still be on sale in 2025, with the second bad facelift.

  2. Fiat seemingly doesn’t have an idea of what to do with Alfa. They join it with Ferrari/Maserati, they unjoin it.
    They have managers that haven’t got the faintest clue about the company they’re working for (KH Kalbfell).
    They start to develop a car based on (of all things) the Neon, they stop development of that product.
    When they finally have an idea they haven’t got enough money to do it properly (Giulia).

    Why can’t they simply let Alfa die?

  3. The Giulia / Stelvio cousins are EXACTLY what was needed. Finally, Alfa Romeo has some credible product again.

    Unfortunately, the Giulia was at least five years too late, and has entered a declining and cut-throat market. This makes it hard to justify derivative models, like a station wagon or two door coupe.

    The Stelvio is, sadly, a necessary evil, but again has launched relatively late into an increasingly congested market.

    All that goodwill created by the 156 and 147 was squandered before Alfa came to its senses. Selling cars is not that complicated, really – make a compelling product and customers will come.

    1. Well Jacomo I almost completely agree with you, but with an allegedly-premium brand like Alfa the customer does also expect a level of customer service that was much lacking at my Alfa dealer during my 156 years. It was terrible.

    2. Did it attract poor quality dealers, or fail to attract good quality dealers and have to make do with poorer quality ones? Perhaps the decent dealers gave Alfa a wide berth.

    3. Adrian: chicken and egg. My bet is that it´s both factors you said, operating together. Why would you want to sell flaky Alfas when you can sell Hondas and Fords? And I don´t suppose Alfa made being a dealer all that attractive. A proper dealer has to have staffed trained in general repairs and also trained in the repair schedules of new models. That means investing time and sending staff on courses. Alfa didn´t invest in training sales people and the dealers or Alfa didn´t invest in training the technicians: bad sales and bad service. Toyota on the other hand….

    4. That is a question which cannot be answered easily. But I’ll give it a stab. Firstly, I would suspect Alfa’s continental European dealers are better than their UK counterparts, given Alfa’s relative success there.

      When Alfa Romeo launched the Alfasud in the UK around 1973, they went from being a relatively small operation in the UK to one selling in excess of 13,000 cars by 1978, when the ‘Sud was at its peak. This was good news for the dealers, but it brought Alfa’s transaction prices down, which made it difficult for dealers to make much money, especially since the ‘Sud was not sold at much of a premium – owing perhaps to its build and corrosion-related maladies. The Alfasud may have been a brilliant car conceptually, and a delight to drive, but it was a disaster for Alfa Romeo in just about every way imaginable, as well as distorting AR’s perception of the UK market.

      When the Alfasud was discontinued, the UK market for Alfa Romeo collapsed, dropping to around 4000 by 1984. The 33 flopped in Britain and the Arna was not only viewed with derision, but also was priced even lower than the ‘Sud, doing nothing for AR’s reputation as an upmarket marque and further eroding the UK dealer’s relationship with Milan. Combined with the rear-drive models which were seen as dated and poorly finished for the money, sales plummeted until products developed with Fiat’s largesse came on stream.

      Life was therefore tough for the UK Alfa dealer. By mid-80’s around only 60% of them were sole franchise holders, with a smattering of independent repair shops for good measure. When Fiat took over, many Fiat dealers were given the Alfa franchise, but could (or would) only provide commensurate levels of customer service.

      With little chance of a decent return, owing to the frequently chaotic situation in Italy, where Alfa went through periods of fresh and enticing new product, only for it all to falter once more, it hasn’t been in most Alfa dealers’ interest to invest or plan for the future.

      However, not all dealers were below par, but Alfas have never been particularly inexpensive cars to maintain and once non-service work is required, the bills soon mount up. Ownership requires commitment. Not everyone has the stomach (or bank balance) for it – a matter which in my view has never been satisfactorily addressed in Arese.

    5. Rest assured that the average Continental Alfa dealer is no better than the average UK one.
      Over time, dealers changed a lot. Our local Alfa dealer in the Sixties to late Seventies went racing with his own pair of Giulia GTAs and even had a rare Giulia estate car. He gave up on Alfas around 1980 and became a honda dealer.
      After the Fiat takeover most traditional Alfa dealers had their contracts cancelled (and spare parts collected and thrown away) with dealerships transferred to existing Fiat/Lancia outlets.
      Their problem is that Fiat didn’t get the change in customer focus from the vehicle alone to the ownership proposition as a whole that was triggered by the enormous expansion of corporate lease contracts in the Nineties. Audi and BMW are doing more than eighty percent of their business as corporate fleet lease and their customers simply expect a satisfying overall experience, including courtesy cars, pick up and return service offerings, well oiled professionalism in sales and customer service and discussion free acceptance of customer complaints.
      That’s something Alfa never got around to deliver because they simply don’t understand the requirement.
      Their complete lack of understanding of basic principles of customer service made me give up being an Alfa owner after more than twenty-five years. I drive around in cars with four rings since then and there could be no bigger contrast in approach to customer care than between these two marques.

      In my home town there’s a road where you find major dealerships FCA, Audi, Mini, Infinity, Porsche and Honda on one side and Volvo, Mercedes, BMW, Smart and Jaguar Land Rover on the other. The FCA location even is the importer’s office.
      Guess which one is the least pleasant to visit, starting with the fact that there’s nowhere to park your car as a porential customer? Guess which is the one where there’s no example of the most important product on display? Guess which is the one where you never get someone on the phone when you want to make a service appointment?
      By the way, amongst the most pleasant places to visit is JLR. If Alfa managed to be half as professional as them it would be an enormous step in the necessary direction.

  4. Ah, our rose-tinted view of that badge. But reverie rarely pays the bills and this modern, consumer driven world of ours remains so fickle when we enthusiasts fair ache for an Alfa revival, or not as the case maybe. I for one do hope Alfa and Lancia could once more reside in the good times but that is as probable as a hot English summer or World Cup win.
    For Senior Marchionne’s “retirement “ I’m suggesting he could manage a football team, have a stab at running the NHS or perhaps become a publican. Think of that down the Red Lion: That new landlord, SWEARS he ran a car business. He don’t look like a car salesman, though…more M &S if you ask me.

    1. English summers are set to become hotter but wetter and windier.
      Turning to Alfa: not a few other storied makers produce credible ranges of cars. Yes, the BMW and Audis of today are not as appealingly idiosyncratic as their driving gloves heyday but they exist and turn a profit. It is probably a function of something in Italian society that makes Alfa, Fiat and Lancia the sad cases they are today, sorry to say. On paper there´s no reason one can´t find buyers for the kinds of car Alfa, Fiat and Lancia are known for. The problem lies outside the factory – which is a real pity. If Hyundai had Lancia the brand would be back in a decade.

  5. Even if only half-way right, both Eoin and Dave´s explanations go a long, long way to explaining why Alfa´s not-bad cars sold as badly as they did. I would find that kind of a dealer experience traumatic as in I would be boiling with rage if my new, warrantied car was treated with anything less than total professionalism. People expect this approach everywhere, even in Burgerland´s and McTucky Chicken outlets.

  6. ” I would find that kind of a dealer experience traumatic as in I would be boiling with rage if my new, warrantied car was treated with anything less than total professionalism.”

    I bought my first 156 blind folded after having seen a couple of prototypes.
    The car was handed over one day after its public presentation in late October 1997.
    The car was presented very nicely under a tailor made Alfa-red woolen tonneau cover with a big Alfa logo. The salesman elegantly whipped the cover off the car, guided me around and opened the room’s door for me to drive my car outside. At this moment my wife told me the electric window in the passenger’s door was inoperative. When I drove it down the ramp I heard an almighty bang from underneath the car. The underbody cladding had fallen off because it had been damaged and come loose when the car was unloaded from the delivery truck. The next day I went to their workshop and asked them what they’d done during their pre-delivery inspection. I got no answer.

    When large scale 156 deliveries started in early 1998 Alfa sold 25,000 of them in Germany alone in the first year.
    When looking at parking spaces of companies like Accenture or KPMG you could see an astonishing numbe of 156s amongst their usual Benzes or BMWs.
    It all turned pear shaped when fleet managers started to cancel their lease contracts because they were no longer prepared to endure Alfa’s service or rather lack thereof. I personally know of several companies where the 156 was taken off the company car list very quickly after negative experiences with the first examples.

    1. I have not had that kind of treatment at the mechanics who service my car. Buying a new car is not an experience I have had so far. It sounds rather horrible: all that money paid up and then expensive indifference.

    2. After I got rid of my last Alfa 166 they continued to regularly provide me with advertising material. After two or three years I wrote to them that I no longer was a customer and didn’t need the brochures.
      The result was an invitation to a meeting with their country managers for both customer service and sales.
      I explained to them why I stopped owning Alfas and why I wasn’t a potential customer for the foreseeable future. The result was that their sales manager told me they heard stories like mine umpteen times every day and that they didn’t know what to do about it. I recommended to them to just walk to the dealer in the next building (Audi) and pretend to be potential customers. Then they should try to replicate their experience in their own shop.

  7. It might be fun to speculate what might have been had Ford won the fight to take Alfa Romeo off Finmeccanica’s hands and not FIAT. Of course, as the histories of Volvo and JLR prove, it probably wouldn’t have been any/ much better, but both have flourished to an extent in their respective post Ford eras.

    My conclusion is that it’s not FIAT’s management of AR that’s been the issue, it’s been FIAT’s management of FIAT. Have any of the FCA brands done anything but go into decline over recent years? The only exception is Ferrari and, arguably, Maserati (I did write ‘arguably’!).

    1. RAM has increased, Jeep went on hold last year as the Cleveland plant was retooled to build the new Wrangler. Nevertheless worldwide FCA sales increased in 2017, so something is selling.

      https://fiatgroupworld.com/2017-results/

      Contrast that with Hundai/Kia’s worldwide sales, down 10% through 2017 from a peak of 8 million some years ago. Yet optimists here think that Hyundai would have made a success out of the Lancia name. I wonder. Their chairman hasn’t appeared to make a public speech since Dec 2016, apparently demoralized.

      https://www.bloomberg.com/news/articles/2018-01-02/hyundai-motor-predicts-2018-sales-slowdown-after-china-backlash

      BTW, China is only part of the H/K slowdown.

      If one visits a Hyundai dealer here, the place is awash with a bewildering variety of cars that all look much alike and are much the same size, plus three not very charming crossovers. The old premise they sold under was virtual equality with established makes, but lower price. Here the lower price has evaporated, leaving adequate but not particularly wonderful vehicles. Why not buy a Honda or a Toyota for the same outlay, and get the real thing? That seems to be the general logic, particularly on CUVs. Hyundai isn’t even close in that arena.

      There is a constant danger of misinterpreting the health of a car manufacturer by assuming one’s local observations are merely a microcosm of the world, Alfa excepted. The lack of Fiats here and their fragility fuel my disdain for the marque, but sales figures worldwide overcome the complete lack of sales here in North America.

  8. For me, Maserati’s glory days – for road cars at least – started with the 3500GT and ended with the last Khamsin. That’s 1957 to 1982. I’d idly speculate that the number of cars made in the period probably amounted to a year of Levantes (5773 in 2017), but what cars!

    At the time of the PAG fire sale I suggested to anyone prepared to listen that Ford would have been better to sell off Ford and keep PAG.

    By the same token, should Sergio sell Fiat? I’ve recently pointed out that the Fiat brand does remarkably well in Europe considering the lack of investment in new platforms and narrow coverage of market sectors. Quite whether these sales are profitable is hard to establish.

    Who’d have them? Hopefully not PSA, given the tide of grim news about their GM acquisitions. Would Tofas parent Koç Holding A.Ş be up for it?

    1. Maserati had a silver age with the return of the revised QP in 1998 and the 3000 GT in the same year. The next QP was another fine machine. Thereafter the cars have changed – they are now too elaborate and ostentatious. I could imagine (just about) driving the 2003 QP. The current one, no. The much maligned QP IV is about the right size and density. For much larger cars a limousine character becomes more relevant (e.g the expressly stately 70s Lincolns or lwb Volvo Executive cars). I forgot the current Ghibli. That’s telling.

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