Fiat Chrysler CEO Sergio Marchionne steps down due to health issue
Sergio Marchionne, who was replaced Saturday as CEO of Fiat Chrysler Automobiles and Ferrari, is gravely ill in a Swiss hospital, according to Italian media.
Marchionne underwent shoulder surgery in late June. Il Messaggero, a Rome newspaper, reported Sunday that “complications arose which compromised the situation, which worsened in recent hours,” according to a Google translation of a story on the newspaper’s website.
The Italian news agency ANSA said he had been admitted to intensive care.
The FCA board met Saturday and named Mike Manley, who had been the head of Jeep and Ram brands, as Marchionne’s successor. Ferrari’s board has named John Elkann as its new chairman after announcing that Marchionne would be unable to return to work.
Elkann also is chairman of FCA.
In a statement Saturday, he said, “I am profoundly saddened to learn of Sergio’s state of health. 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.”
Italian reports said Marchionne is in a clinic at University of Zurich. At his side, the reports said, were his two sons and his partner of several years, Manuela Battezzato, who works in FCA communications.
The Corriere della Sera newspaper of Milan said his health was characterized as “very serious.”
The Milan paper said that Marchionne appeared to be very tired at a June 26 Jeep event in Rome. “That day, after the meeting with the commander general of the Carabinieri Giovanni Nistri, Marchionne returned home exhausted,” a Google translation of the report said.
Marchionne, 66, is a dual Italian-Canadian citizen with an MBA from the University of Windsor and a career mostly in Europe. He was picked to lead Fiat in 2004. The company was paired with Chrysler as the smallest of the Detroit 3 automakers emerged from bankruptcy with the help of a U.S. government bailout in 2009. Fiat completed its deal for Chrysler in 2014, and in 2017, Fiat Chrysler reported a pretax profit of $4.4 billion (3.5 billion euro).
Marchionne leaves a lasting legacy with Detroit and his work at FCA, for without his “gamble and vision,” Chrysler wouldn’t exist today, said Michelle Krebs, executive analyst for Autotrader.
“During the Great Recession and even within President Obama’s task force, there were thoughts of letting it go,” said Krebs. “He leaves behind a very healthy company. It’s achieved phenomenal success. I’ve been to all of the five-year-plan meetings and every time they looked incredibly ambitious, but they generally achieved them. It’s quite miraculous frankly.”
She said handing over FCA’s leadership to veteran executive Manley is the right move because Manley knows every aspect of the company to carry on the new five-year-plan, which FCA unveiled last month in Italy. It relies heavily on the success of Jeep and FCA’s global brands.
Marchionne, 66, is a well-known workaholic and was a heavy smoker until about a year ago, when sources say he quit. His current health conditions come as a shock, said Krebs.
He had planned to retire in 2019.
Carl Galeana, president of Galeana Automotive Group got to know Marchionne in 2008 when Galeana was chairman of the Detroit auto show.
Galeana Automotive has seven dealerships, two in metro Detroit: Van Dyke Dodge and Fiat Alfa Romeo in Lakeside. The others are in Florida and South Carolina.
Galeana was the first Detroit dealer to open a Fiat dealership in 2011, and Marchionne came to the store’s grand opening, Galeana said.
“He drove himself there and he was just the greatest guy and he saved our butts, literally,” said Galeana. “If it wasn’t for him, we’d all be gone. As far as his legacy, there it is.”
The news of Marchionne’s declining health and leadership change “shocked” him, Galeana said.
“I am just happy he came to FCA,” Galeana said. “He was a guardian angel and he saved us.”
Smoking and watches
Marchionne is a bit of a “character,” said Jeremy Anwyl, CEO of Trucks.com in Tampa, but has “this singular ability to make people feel at ease and important.” Anwyl got to know Marchionne after meeting him in 2009, during Anwyl’s tenure as CEO of Edmunds.
Once at the Detroit auto show, Marchionne “Somehow figured out how to smoke in there, even though it’s not legal,” Anwyl said. He said Marchionne was smoking when a man approached him and Anwyl. The man was wearing an elegant Swiss watch that Marchionne admired.
“Sergio liked watches so they got into this intense conversation about Swiss watches for 20 minutes,” Anwyl said.
Meanwhile, several high-level Canadian leaders were in the hallway waiting those 20 minutes to meet with Marchionne, but “Sergio had this passion about these watches and was going to continue the conversation.”
Marchionne’s approach to leadership was similar, Anwyl said.
“He was known to walk the hallways (at FCA) and jump into people’s offices and talk to them and get to know them on a personal basis,” said Anwyl. “He would find people he thought were smart, they might not have been experts in that area, but they wanted a chance. He gave them this once-in-a-lifetime opportunity to prove themselves.”
Marchionne often “upended normal career pathing and for the people he picked” for certain jobs, and if they did well, they were rewarded.
“But the job he asked them to do was very difficult,” said Anwyl. “Look at the Chrysler bankruptcy. Nobody said that could be done, but they did it. He set high goals and the people he led worked ridiculous hours.”
There were regular “global meetings” that would run 24 hours, he said. At those meetings, which were “intense,” decisions were made on the spot, Anwyl said. He said that is how FCA recovered and moved quickly in the challenging markets.
“That was his style. He pulled it off on more than one occasion,” said Anwyl. “The fact that FCA exists, is his very tangible legacy.”