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‘Unconventional, but highly effective’: Hard-working Marchionne led with distinct style

July 25, 2018

Crain’s Detroit Business

By: Dustin Walsh

In December 2011, Crain’s Detroit Business and Automotive News reporters met with organizers from the North American International Auto Show, same as every year, to discuss the upcoming January show.

The floor plan, a complex game of Tetris for the show’s organizers, revealed a small, unmarked room near the Fiat Chrysler display in Cobo Center. Someone asked what, exactly, was that room.

The 2012 Detroit auto show’s chairman that year was Bill Perkins, owner of Bill Perkins Automotive Group. He bellowed a laugh.

“That’s Sergio’s smoking room,” he blustered.

Fiat Chrysler CEO Sergio Marchionne, a well-known smoker, required a private room to enjoy his vice on the show floor. The hours following that anecdote were filled with frantic calls from Chrysler’s communications apparatus condemning the notion that its top executive would have a smoking room — Michigan had banned smoking in public venues in 2010. He did. We saw it.

But that was Marchionne. He did, and said, what he wanted. He was an iconoclast.

“He was definitely unconventional, but highly effective,” said Sandy Baruah, president and CEO of the Detroit Regional Chamber. “He had a distinct style, from how he dressed to how he spoke. He had the most effective monotone speaking voice you’d ever heard. He made people pay attention to him.”

In May 2014, as Marchionne launched a five-year business plan for the combined Fiat and Chrysler, Automotive News graded his first five years atop the formerly bankrupt Chrysler. Marchionne received a composite grade of B+, and he objected, albeit tongue-in-cheek, that the grade was too low during a news conference after the daylong rollout of the 2014-18 business plan.

He may have been right. Under his tobacco-stained thumb, Fiat Chrysler grew from a $2 billion company in the depths of the Great Recession to a $30 billion company today. And he found a winning formula in stripping off undervalued assets from the Italian industrial conglomerate and monetizing them for shareholders, doing so with what is now CNH Industrial ($20.25 billion) and Ferrari ($22.34 billion).

FCA plans to reveal its 2018-22 business plan June 1 in Balocco, Italy, outside Fiat’s historic home in Turin. The site and date have a nostalgic double meaning: Marchionne became CEO of Fiat on June 1, 2004, and Balocco was where he laid out his first five-year business plan for the company. Marchionne said last month that the 2018-22 plan would be carried out by his successor, whose identity would be revealed by the FCA board sometime after the presentation.

With Marchionne gravely ill Saturday, the company appointed Mike Manley, 54, head of the automaker’s Jeep and Ram brands, as Marchionne’s successor.

It’s the attention to detail in those now legendary presentations that provided a fine-tuned control that propelled Chrysler, said Julie Fream, president and CEO of the Original Equipment Suppliers Association.

“(Sergio) capitalized on the assets of the company, particularly Jeep and Ram, created an intense and driven culture, focused on achieving objectives and (he) walked the talk,” Fream said. “Everything he expected of his team, he also expected of himself.”

That style and all its machismo still created value, Baruah said.

“It’s a mirror of what he did with the brands,” Baruah said. “He knows how to frame an issue or a set of facts in a presentation in an incredibly unique and impactful way. He did the same with the brands. If Fiat Chrysler is known for anything, it’s the brand power he created. They have some of the strongest identities in the industry.”

Marchionne had no shortage of people who will disagree with him, but most colleagues, competitors and acquaintances respect his intellect. He is unapologetically emotional — as in 2014, when he choked up reading aloud from a scholarship application from the daughter of an FCA line worker in Detroit. He is also unabashed about questioning the foundations of the auto industry and capitalism itself. His 2015 analysis of the auto industry’s wasteful spending habits, “Confessions of a Capital Junkie,” was roundly applauded by analysts for its thoroughness and drew quiet praise from competitors, even if they didn’t act on it.

“The Detroit area, Fiat Chrysler and the auto industry all are in better shape because he had a vision for Fiat and Chrysler that he successfully executed,” said James Verrier, president and CEO of BorgWarner Inc.


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