Fiat Chrysler Automobiles NV appointed a new CEO after the health of long-time leader Sergio Marchionne unexpectedly deteriorated after surgery, finishing with his death last weekend. Although it has not been spelled out, I think he must have had a massive stroke.
The newly appointed CEO is Mike Manley, formerly head of the Jeep and Ram brands, and who took over as CEO of the Italian-American company effective immediately.
“Fiat Chrysler Automobiles NV communicates with profound sorrow that during the course of this week unexpected complications arose while Mr. Marchionne was recovering from surgery and that these have worsened significantly in recent hours,” the automaker said in a statement. “As a consequence, Mr. Marchionne will be unable to return to work.”
FCA Chairman John Elkann said in a statement he is “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.”
“The iconic reign of Sergio Marchionne is over at FCA,” said Rebecca Lindland, senior analyst at Kelley Blue Book. “Mike Manley is a very worthy replacement, with his global expertise and experience running Jeep, especially the highly successful launch of the Jeep Wrangler this year. While running FCA is a wider, broader job than running Jeep and Ram, Manley has been a loyal and worthy lieutenant to Marchionne for years.”
“Mike Manley is a logical, solid choice to replace Marchionne in light of the success of Jeep and FCA’s future being dependent on the success of Jeep and other global brands,” said Michelle Krebs, analyst with Kelley Blue Book.
Marchionne’s health condition sped up the timeline for a succession decision. He had already announced he was planning to leave by early next year.
Marchionne, known for his rumpled sweaters and nonstop work habits, is one of the longest-serving CEOs in the auto industry. He was appointed in 2004 as the fifth Fiat chief in a two-year period. He managed to return the carmaker to profit in 2005 by cutting costs, laying off workers and then looking for a partner. The company had lost more than 6 billion euros ($7.04 billion) in 2003.
With the acquisition of Chrysler in 2014, completing a five-year process, he gave Fiat the global scale needed to survive. Still, as the world’s seventh-largest automaker, the company may lack the size it needs to compete in an industry being reinvented by the emergence of autonomous driving and electrification.
“The bulk of this business is producing earnings which are almost genetically predetermined,” Marchionne had said, “because of decisions that have been made in the past and which are now being executed in a market where that call has been made. The reality is 80 percent of the earnings of this house in 2022 are only going to come from the four brands that we heard about today.”
Those plans include efforts to leverage the highly profitable Jeep and Ram brands in the U.S. and abroad with higher-margin products that fill holes in their respective portfolios.
