Sergio Marchionne, former CEO of Fiat Chrysler Automobiles, dies at 66.
Known as the charismatic executive who saved not one, but two failing automotive companies, Sergio Marchionne has died at the age of 66. “Unfortunately, what we feared has come to pass. Sergio Marchionne, man and friend, is gone,” says John Elkann, Chairman of Fiat Chrysler. After his sudden resignation as CEO, Marchionne suffered an embolism while undergoing an operation for an invasive shoulder sarcoma. Over a long career in the automotive world, Marchionne leaves behind an incredible mark on the industry.
Early Career and Life
Sergio Marchionne was born in Chieti, Italy on June 17th, 1952. At the age of 13, he emigrated to Toronto, Canada with his family and relatives. Because of this, he had a dual Canadian and Italian citizenship and was fluent in English, Italian, and French. Marchionne studied several subjects at Canadian colleges and earned himself a Law Degree in 1983 and a Masters of Business Administration in 1985. He was recognized as an Accountant, Tax Specialist, Attorney, and Business Strategist. However, he rose-to-fame the moment he arrived in the automotive world.
After suffering a tremendous $2.5 billion loss on the center of auto operations in 2004, Fiat was hanging on for dear life. In hopes of gaining the attention of Gianni Agnelli, the former president of Fiat, Marchionne moved to Europe and succeeded in his goal – he was given full control of Fiat. In order to settle previous contractual debt with Fiat, Marchionne was able to negotiate a $2 billion payment given by General Motors. He then went on to invest $10 billion euros to develop 20 new Fiat models in four years.
“What I found was … a company that had been run by a foreign entity for a long period of time, that had taken all of its wares on the way out. In 2006-2007, it had been flipped over to financially competent – but industrially incompetent – private equity investors who has run it for a period of time and then run into a brick wall in a crisis. What we ended up looking at [when Fiat arrived] was empty cupboards in terms of technology and product. And so we started from scratch.” – Sergio Marchionne.
Later, another automaker Marchionne pulled out of the fire was the Detroit-born Chrysler Group LLC. In order for Chrysler to quickly emerge from bankruptcy, the government financed a $6.6 billion loan. Marchionne’s ultimate goal was to get the companies healthy enough to enter private capital markets, while decreasing their high-interest debt from the government. Marchionne did this by investing in new products, while Fiat and Chrysler shared vehicles, engines, and factories. By 2011, Marchionne had taken full control over Chrysler. He then went on to meet with several dealers in Las Vegas in order to set up a “promise for a promise” agreement. The agreement reached was that Fiat Chrysler would invest and improve products, but only if the dealers also promised to put their money in stores and welcome the best operating practices with consumers. Then in 2014, Fiat gained full ownership of Chrysler.
It was no secret that Sergio Marchionne was highly against Electric Vehicles. After spending about 10 years protesting against EV, and also stating that they were a waste of money, Marchionne finally gave in. Mostly due to Maserati taking a huge hit in sales after the Tesla was released. On July 2nd, Marchionne announced his $10.5 billion 5-year plan to electrify his Jeep, Ram, Alfa Romeo, and Maserati lineup before retiring in April of 2019. Unfortunately, he wouldn’t make it. Not only has Marchionne’s death ignited numerous tributes from his automotive competitors but its a reflection who he was as a businessman. The automotive world lost a legend.
“What a person has done during his life should not be measured by what he has achieved for himself, but rather by what is left behind for others.”
– Sergio Marchionne (1952-2018)