The automotive universe reels as a giant leaves the stage.
It wasn’t supposed to end like this. The plan had been to anoint a successor in 2019, perhaps even bow out having secured the deal to end all deals. For almost a decade and a half, FCA’s Sergio Marchionne has been the master of the unexpected, but the sudden news regarding his deteriorating medical condition has brought a controversial reign to a premature, troubling and somewhat ambivalent end.
From his appointment as Fiat CEO in 2004, Marchionne appeared not to have bothered to read, never mind adopt the auto-business-CEO handbook. Arguably the first post-factual auto boss, Marchionne’s stock in trade has been to keep everyone guessing. But unlike the current incumbent of the White House, (whose somewhat unorthodox approach he shares) he really did seem to have mastered the art of the deal.
Be it the $2 billion extracted from General Motors to extricate Fiat Auto from its then-unwanted post-millennium alliance, the agreement with Ford to co-develop the Tychy-Ka / 500 on a common platform (believed to have been funded by the blue oval), to the audacious coup to take over the bankrupt Chrysler business in 2009 and its subsequent reconstitution as FCA, he seemed capable of pulling rabbits out of hats at will.
In his wake however, lay the collateral damage of the Marchionne shock doctrine, as model lines and entire marque identities were cast aside in the ‘at-all-costs’ push towards viability. One thing eluded him however, the mega-merger he repeatedly told anyone prepared to listen was required to secure the business.
Marchionne argued long and hard for increased consolidation within the motor industry, but as car companies battled an unprecedented array of seemingly intractable challenges, they seemed ill-prepared to listen, especially given FCA’s notoriously slapdash approach to doing business.
Yet despite his many critics, FCA’s current position (on paper at least) appears stronger than it ever has been. One could argue of course that Marchionne has been fortunate, the sales successes of Jeep and Ram coming on the back of a US-market recovery based on low oil prices, an SUV-boom and the ready availability of inexpensive credit. But for many observers, the jury on FCA as a medium-term business proposition remains very much out.
Recent reports seem to confirm that the sudden deterioration in Marchionne’s health brooks no return. FCA have acted decisively by appointing former Jeep CEO, Mike Manley as his successor, and are keen to present matters as business as usual. But it isn’t, and can’t be; yesterday’s resignation of high profile EMEA chief, Alfredo Altavilla in the wake of Manley’s ascension, suggests the sudden transition will not be without consequence.
That a sizeable vacuum would be left by the departure of someone of Marchionne’s stature was always inevitable, but when it’s as sudden and shocking as this, it’s an entirely new frontier. Manley has formidably big shoes to fill and an awful lot of vexing matters to deal with, so we can be certain that his appointment has been made with half an eye to the financial markets who will be watching developments with forensic attention.
Clearly it’s still far too early to accurately assess Marchionne’s legacy. What we can say is that his tenure bought FCA sufficient time to plot a survival course and a state of readiness for a strategic alliance which could secure its future. At what cost this has been achieved remains to be seen however.
But while Marchionne leaves the field having achieved more than his detractors could possibly have predicted, he has also left a tremendous amount of detritus where it fell. From the half baked reinvention of Maserati, the sluggish reboot of Alfa Romeo. From to the slow, painful asphyxiation of Lancia, to the growing irrelevance of brand-Fiat. Not to mention the effects of FCA’s slash and burn approach to brands-Chrysler and Dodge at the altar of Jeep and Ram.
Nevertheless, it’s very difficult to envisage an FCA without him at its helm. And while his ultimate departure was heralded, not even Mr. Marchionne’s most ardent critic (of which this author was one) would want to see him go out like this. We express our sincere condolences to his family and loved ones.
Sergio Marchionne: R.I.P.
[Author’s note: the text has been modified to reflect the sombre news of Mr. Marchionne’s passing. (July 25 2018)]