He was supposed to hang in there until 2019.
Sergio Marchionne was set to retire next year. He would have left the CEO position at Fiat Chrysler Automobiles. However, his position on the boards of CNH, Ferrari, and of FCA was undetermined after his scheduled retirement. Nor was there any choice for his replacement in all of his positions – including the key CEO job at FCA. He deferred all comments regarding his succession plan at the last Investor's Day in May.
Three weeks ago, Marchionne had surgery on his shoulder in Switzerland. After the surgery, Marchionne developed complications as his convalescence was prolonged. Sources close to the 66-year-old Italian-Canadian business leader Marchionne said that his condition was "grave."
Due to his condition, Marchionne had no choice but to step down.
After a board meeting in Italy, it was determined that Michael Manley would replace Marchionne as FCA's CEO. Manley lead Jeep to become a leading asset for FCA. He also took over Ram Trucks to help lead their charge in all markets they are in.
Manley is a great guy. His dry British wit and straightforward work ethic is part of the reason for Jeep's success since Fiat began investing in Chrysler. I have no doubt that he will lead FCA onward by upholding the latest Five-Year Plan, as well as making key decisions on the North American product line and other global issues that FCA are working through. This includes dealing with the rumor of a transaction by Hyundai for FCA – or, whatever such agreement might transpire, if at all true. I also have no doubt he will be able to deal with the impending tariffs by the USA government and to either fight against them or plan accordingly a way forward if they are implemented.
Yet, the palace intrigue over this transition thickens the plot. Alfredo Altavilla was a leading candidate to fill Marchionne's spot. He quit the company after the announcement to go with Manley as the immediate CEO of FCA and of the North American business unit was made. Altavilla was the head of European, Middle Eastern, and African business for FCA.
I am sure there will be more moves within the FCA realm. But, there is a bigger story here. It is the state of Marchionne's health and the legacy he will leave behind.
For a bean-counter, he truly took stock in not only the success of Fiat S.p.A. prior to the global economic crisis, but in his leadership after his initial investment into Chrysler. This lead to accepting the Troubled Assets Relief Program loan to enable this turnaround of Chrysler – and playing back the loans when it was fiscally sound to do so.
Yet, I am not ready to write an obituary for Marchionne. The news of an ailing Marchionne, along with the ascent of Manley into the top role at FCA, has been on the front of my mind. Through the twists and turns from Iacocca's hiring to Saturday's announcement, Chrysler had been a story where the underdog would save the day, only to become an underdog again.
I have witnessed this company go from down to up and onward through the ups and downs of corporate governance and economic pressures. Marchionne came in with Fiat to take Chrysler, merge it, and created a stronger global player in the industry.
It is not without its faults. Quality issues, recalls, and the diesel issue could have discredited Marchionne and his efforts at FCA. No. The man is resilient, even if you do not think he is making the right decision, question his judgment on various statements, or agree with anything he said or does.
I will admit to something here. Having been around a lot of FCA people, the one person I wished I would have met was Marchionne. I heard many things about how he was a "plant person" – someone who can talk to the rank and file inside FCA's assembly facilities and honestly root for them. He was personable, approachable, and not pretentious at all.
Marchionne mentored some of the best automotive talent working today. Though Ralph Gilles had been around since Daimler had Chrysler, a recent Instagram post had the Vice President of Design calling Marchionne a "mentor." He was also responsible for making Fred Diaz a top leader in this industry. Diaz has gone on to work at Nissan and Mitsubishi, emboldened with the tools Marchionne mentored him with.
The biggest legacy of Marchionne and his time with Fiat S.p.A, FCA, Ferrari, and CNH are how he was able to transform these companies under his leadership into their respective successes.
With every report from Zurich, Turin, London, and Auburn Hills, the so-called "inevitable" just seems unavoidable. It is some sort of "death watch" in play – a bit macabre, if you ask me.
Perhaps we should also focus on Manley's ascension with FCA's board confirming his position as CEO and go forward with the business at hand. I will, however, monitor this story regarding Marchionne's condition post-surgery as he is at the University of Zurich's hospital with his family.
The story continues…