Remembering Fiat-Chrysler's Sergio Marchionne
Chrysler and its storied American brands live today because ol’ Sergio Marchionne – a poker player – gambled and won.
As Detroit’s number three automaker slumped toward bankruptcy, the CEO of Italy’s Fiat bet he could combine the weakest players in Europe and the United States to forge a global contender. One that could generate fatter profits and carry less debt.
The new Obama administration relented. So an Italian schooled in Canada got control of Chrysler for essentially nothing arguably the shrewdest acquisition the global auto industry has seen in a generation.
The 66-year-old Sergio died this week in a Zurich hospital. There are no confirmed details, except for a statement saying he’d been ill for a year. Chrysler learned of his condition only a week ago.
Sergio’s impact on the global auto industry can’t be overstated. The global automaker he shaped from the wreckage of Fiat and Chrysler saved tens of thousands of jobs in Michigan. He leveraged Jeep, one of America’s greatest brands, into a global colossus. He saved Fiat, too, because he rightly anticipated the boost the transatlantic group would get from the growing popularity of Ram trucks and Jeep SUVs.
Even now, Jeep and Ram produce the bulk of revenue and profit for the group. And they’re the future, he reminded investors just last month in Italy.
Sergio was ahead of his time. In an industry slowly transitioning from business suits to Silicon Valley jeans and jackets, he only wore black cotton sweaters and black pants. He ended car production in the States long before rivals General Motors and Ford Motor wised up and started cutting car models.
He had the guts to say what most of his fellow CEOs didn’t: the auto industry is a giant consumer of capital that generally fails to deliver acceptable returns on investment. That’s why he wrote what he called “Confessions of a Capital Junkie.” It was his manifesto on consolidationm the intellectual basis for the deal of deals: the supposed merger between GM and Fiat Chrysler.
Legendary auto exec Bob Lutz said Sergio “pursued his vision even when he was ridiculed for it. He was smart enough to know what he didn’t know.”
In a CEO, few qualities are more important than that.
Sergio’s sharp intellect powered an equally sharp tongue. When Volkswagen announced one year at the Detroit auto show that it planned to sell 10 million vehicles in a single year, I asked him about it.
“We’ve seen that movie,” I recall him saying. “It’s called World War II.”
Sergio got Detroit. He understood its grit and history. He identified opportunity in its reckoning. His leadership assured the Motor City would remain a vital cog in an industry being quickly changed by the rise of China accelerating technology and competition from Silicon Valley.
He made a difference. He spied redemption for a company almost given up for dead – and that’s something people around here should never forget.
Daniel Howes is a columnist at The Detroit News. Views expressed in his essays are his own and do not necessarily reflect those of Michigan Radio, its management or the station licensee, The University of Michigan.