Chrysler’s demise seemed near in 2009 as the US automaker found itself in the throes of bankruptcy, buoyed only by billions in emergency government loans approved under the administrations of former US Presidents George W. Bush and Barack Obama. Yet Sergio Marchionne, who had by that time served for half of a decade as Fiat Auto’s Chief Executive Officer, saw in Chrysler an opportunity to gain a partner capable of helping reduce product development costs and boost distribution.
So, while the Obama administration strongly considered liquidating Chrysler, the Canadian-Italian business executive offered to instead purchase a controlling stake in the legacy US automaker, “pick[ing] up the Chrysler business for almost nothing,” in the words of AutoPacific Manager of Product Analysis Dave Sullivan. “It was a gift.”
It would be another half-decade before the Fiat Group would take full ownership of Chrysler, merging to create Fiat Chrysler Automobiles, but it took nowhere near as long for the Fiat brand to relaunch in North America after a 25-year absence. Fiat itself was in a bind at the time; the Italian automaker had lost $7 billion before Sergio Marchionne took the wheel in 2004. Although it had fought its way back to black within two years by extracting some $2 billion out of a GM strategic partnership and laying off thousands of workers, its future was far from certain.
“If we stand still and do nothing we are doomed,” Marchionne said years ago, according to a note from Sanford Bernstein analyst Max Warburton. “I can’t close it, it’s a car company. I’ve tried to sell it, believe me, but there are no buyers. The only way out is to build it.”
And build it he did, working tirelessly and, according to some, practically living on a plane, allowing him to be hands-on in North America, Europe, and Asia Pacific as the automaker fought to gain solid footing in those markets. He was notable among global auto executives for not getting caught up in the hype surrounding electrification, autonomous vehicles, and mobility, proving himself quite able to be frank in his assessment of those topics.
“I don’t know of a [carmaker] that is making money selling electric vehicles unless you are selling them at the very, very high end of the spectrum,” Sergio Marchionne said at an auto show press conference last January. “Whenever we end up going to auto shows, the intensity with which we make these proclamations goes up exponentially,” he added, referring to automakers’ claims about how electrification and autonomy will transform the world, before saying that FCA would remain “technology neutral.”
That’s not the only area in which the executive proved himself a maverick. For years, the CEO pushed hard for a tie-up with another major global automaker, insisting that greater consolidation within the industry was the only way forward. And years ago, while rival automakers were still fiercely committed to small, fuel-sipping economy cars, he signed off on canceling the Dodge Dart and Chrysler 200, with no replacements in sight.
Ford only just got around to making a similar move itself, announcing earlier this year that it would cancel all of its “traditional sedan” models in North America due to slipping sales. An automaker doesn’t necessarily have to offer an entrant in every single segment, it turns out.
Perhaps most prescient of all of Marchionne’s moves as CEO, he put his full support behind the Jeep brand as crossover and SUV sales continue to surge, both in North America and abroad. In just the last several years, the Jeep Cherokee and Grand Cherokee have both received significant updates, the Compass and Wrangler have been completely redesigned, and for 2015, the brand launched the subcompact Renegade, hashing out plans to bring out another two brand-new SUV nameplates in North America soon enough.
The results have been nothing short of spectacular, with Jeep-brand US sales quadrupling to nearly 930k units in 2016 from roughly 230k when Marchionne first became CEO of Chrysler in 2009. The brand has seen similar success in Europe and China, and FCA has set a target of achieving 1.9-million total global sales this year. (It’s no accident that Fiat Chrysler’s new CEO comes from the automaker’s coveted Jeep brand.)
Brilliant, candid, humorous, and a natural-born leader, Sergio Marchionne’s loss will be felt across the industry; the 66-year-old executive was today confirmed to have died after suffering complications resulting from a surgical procedure performed on his right shoulder. It’s our belief here at Fiat Chrysler Authority that Marchionne was the last of a dying breed, and that we’ll perhaps never again see his like.
Our thoughts go out to his partner, his children, his friends, and everyone within the Fiat Chrysler Automobiles family.
(Source: Detroit Free Press)