The Italian Iacocca: Sergio Marchionne
By Gunnar Heinrich - www.automobilesdeluxe.tv
SERGIO MARCHIONNE, CEO of Fiat, is the turn-around guru.
Time and again, in one Italian enterprise after another, Sr. Marchionne, a Canadian-Italian CPA , was called in at the 11th hour to make a daring rescue. And time and again, against all odds he succeeded in saving the day. Now that the company he heads is reportedly interested in entering a partnership with Chrysler must mean relief to many in Motown’s most troubled car maker.
Consider Sr. Marchionne’s tour de force with Fiat, SpA.
Founder Gianni Agnelli died in 2003 leaving a grand legacy but a car maker whose future was every bit as dark as ChryCo’s. The company’s small boutique subsidiary Ferrari was the only profitable automotive arm and Fiat’s partnership with GM had deteriorated thanks to both car companies’ declining sales and market shares.\
That’s roughly when Sr. Marchionne rode in to Turino on what now seems like a white horse- or more aptly in a white Cinquecento Abarth. On his watch, Fiat re-tooled itself into a mass producer of inexpensive Italian-cool - a kind of United Colors of Benneton for the automotive world, if you will. He managed this by green lighting the new Fiat 500.
The little hot-hatch became an instant must-have in France and Italy and managed to challenge the likes of MINI, Smart, and the VW Bug for most appealing hatchback.
Then Sr. Marchionne managed to export the production of Fiat’s most significant models to countries like Poland where Italian labor laws wouldn’t strip away profit margins on the low-cost 500s.
The cherry on the sundae was when the CEO managed to wrest $2 Billion from GM in exercising one of those ubsurd it’ll-never-be-that-bad-in-a-million years kind of buy back clauses.
“Marchionne personally negotiated the deal that forced General Motors to pay out $2 billion to Fiat to free itself from a put option in the companies’ 2000 joint-operating accord that could have forced the U.S. automaker to buy the Turin company outright,” reported Jeff Israely for Time.
That Sr. Marchionne is now considering a partnership with Chrysler may just be the hail-mary pass to the weakest of Detroit’s links. The partnership makes a lot of sense - Fiat gains immediate access to Chrysler’s dealer network through which it could relaunch the Fiat and Alfa Romeo marques in the world’s largest car market.
Chrysler, wary of its failed history with European partners (the Pentastar’s short-term stake in Lamborghini, the short-term parternship with Maserati, and then the Daimler-Benz take over and then fire sale), still has much to benefit from the rejuvenative powers of this partnership; including the access to Fiat’s front-drive parts bin for making eco-friendly cars for the Green-lobbied tomorrow.
That and the master turn-around skills of one former Deloitte and Touche accountant might just be that exterior force which sponsors superior positive change in a company that so desperately needs a tomorrow. With Sr. Marchionne managing its turn-around, Chrysler just might have found its Italian Lee Iacocca.