By Richard Truesdell
Fiat Chrysler Automobiles CEO Sergio Marchionne died Wednesday at age 66 due to complications following surgery. The hard-driving executive is credited with saving both Fiat and Chrysler.
"Sergio Marchionne, man and friend, is gone," FCA Chairman John Elkann said in a statement. "My family and I will be forever grateful for what he has done."
FCA shocked the auto industry July 21 when it announced that Mike Manley, head of Jeep and Ram, would take the FCA helm due to Marchionne's unexpected illness.
In 2004 the charismatic Marchionne took the reins of a virtually bankrupt Fiat, an Italian automaker that had gone through five CEOs during the preceding two years, and returned the company to profitability, mostly on the back of an incredible work ethic involving frequently working 18 hours a day, 365 days a year.
Born in 1952 in Chieti on Italy's east coast, Marchionne was raised near Toronto. He earned accounting and law degrees. Since his death, the world's financial press has been covering the highlights of his career. Here are the bullet points:
Marchionne is appointed CEO of Fiat, moving from a post as CEO of goods inspection with SGS SA, a Swiss company that provides inspection, verification and certification services. With zero auto industry experience, he pledges to complete a turnaround plan initiated by his predecessor to end years of losses and soon announces plans to make Fiat more efficient. This brings him into immediate conflict with Italy's powerful industrial unions.
In what may have been the masterstroke in his effort to rescue Fiat, Marchionne extracts $2 billion from GM to end a dispute over ownership of their Fiat Auto joint venture and announces plans to terminate other alliances with the U.S. carmaker. To do so, Marchionne enforced a put option that required GM to take control of Fiat or pay a breakup fee. Variations of the small common components and systems platform co-developed with Opel during the joint venture are still used to underpin Jeep and Fiat models including the Jeep Renegade, Jeep Compass, Ram ProMaster City, Fiat 500L and Fiat 500X.
With both GM and Chrysler in bankruptcy, the Obama administration crafts a plan for Fiat to take over management of Chrysler assets by taking operational control, granting it a 20 percent stake in the company with the rest held by the U.S. and Canadian governments along with the United Auto Workers. Marchionne pledges to reopen factories idled during Chrysler's bankruptcy. Marchionne commits no cash, instead pledging to share engineering resources and technology with the struggling U.S.-based company.
The 2011 Jeep Grand Cherokee launches, the first vehicle from the Chrysler family of brands (Chrysler, Dodge and Jeep) to be launched under Fiat management. Co-developed with Mercedes-Benz during the DaimlerChrysler era, it has become a runaway success. Ram Truck is born.
Fiat spins off its industrial assets as a precursor to creating a global automotive company, combining its own operations with Chrysler's.
At a J.D. Power automotive conference in the U.S., Marchionne rebuffs an attempt by Volkswagen's Ferdinand Piech to buy Alfa Romeo from Fiat, saying, "As long as I am CEO of Chrysler and Fiat, Mr. Piech will never have Alfa Romeo. It's hands off, I told him. I will call him, and I will email him."
Fiat completes the acquisition of the remaining 41.5 percent of Chrysler from the UAW, making Chrysler Group a wholly owned subsidiary. On Feb. 2, 2014, Fiat Chrysler Automobiles begins trading on the New York Stock Exchange under the ticker symbol "FCAU." Fiat spends $4.9 billion to acquire Chrysler while assuming the automaker's $5.5 billion pension liability.
The merged Fiat Chrysler Automobiles NV, legally incorporated in the Netherlands, makes its debut on the NYSE. Shortly afterward, the company announces a spinoff of luxury brand Ferrari.
Marchionne writes a presentation, "Confessions of a Capital Junkie," bemoaning the fact that the auto industry requires immense capital investment disproportionate to the potential gain for shareholders and concludes that such investment is unsustainable in the long-term.
Ferrari NV, with Marchionne as chairman, begins trading in New York with a market value of about $10 billion. That success comes after GM rebuffs attempts by Marchionne to instigate a merger that would create the world's largest automaker. Some analysts believed that Marchionne exercising the $2 billion put option in 2005 may have led to GM turning down the offer. Others believed that there was too much product overlap, especially in the light truck sector, for the merger to be viable.
Marchionne puts major merger attempts on hold to focus on cutting debt at FCA.
Marchionne unveils his final five-year plan for FCA, aimed at doubling profits and restoring dividends for the first time since the 2014 merger. The company also plans to invest $11 billion electrifying its fleet through 2022. Marchionne also announced that FCA's industrial debt had been retired, that it was debt-free, again confounding critics who said such a move was impossible.
While the tributes have poured in from both sides of the Atlantic, Marchionne was not without his detractors. Many include former Fiat and Chrysler executives who described him, off record, as an unrelenting task master with a reputation for being a workaholic who pushed his subordinates to work as hard as he did.
But his record of success, especially with regard to creating value for shareholders at Fiat, Chrysler and FCA, is unparalleled. From 2004 when he arrived at Fiat until to 2018 when his failing health ended his reign as CEO of FCA, Marchionne reportedly increased shareholder value by a factor 10, the bottom-line measurement of any corporate executive.
On a personal note, during more than 20 years of covering the auto industry, I had a single one-on-one conversation with Marchionne on the afternoon of the first press day at the 2010 Paris Motor Show. I found him standing alone at the Jeep exhibit, no media handlers or body guards to be seen. I introduced myself and we had an almost surreal conversation about my classic Jeep Super Wagoneer and the Grand Cherokee that had just been revealed at the show. It was the first Chrysler vehicle introduced under Fiat ownership and it has been a profit powerhouse for FCA since then.
Of the Grand Cherokee he said, "The kids did a great job." Now those kids, led by new FCA CEO Mike Manley, are on the spot to deliver on the Marchionne's legacy. You will hear the cliche that Manley has huge shoes to fill. That might be correct, but something tells me Manley and his team will be up to the task.
Want to know more about what made Marchionne unique among corporate executives? Watch this March 2012 "60 Minutes" interview.