Sergio Marchionne Built Fiat Chrysler In His Own Unconventional Way

Sergio Marchionne, outgoing CEO of Fiat Chrysler Automobile (left) and Ralph Gilles, FCA Global Head of Design
Sergio Marchionne, formerly CEO of Fiat Chrysler Automobile (left) and Ralph Gilles, FCA Global Head of Design

Sergio Marchionne had to leave the top spot at Fiat Chrysler without ensuring the long-term viability of the company’s brands, products and workforce.

After he developed medical complications over the weekend and in the wake of recent shoulder surgery, Marchionne was assessed as gravely ill and Fiat Chrysler abruptly announced on Saturday that he would be leaving the CEO’s role. Later this week, it was announced that Marchionne died at the age of 66. “Unfortunately, what we feared has come to pass,” John Elkann, the chairman and chief executive of Exor, the holding company of the family that founded Fiat, said in a statement. “Sergio Marchionne, man and friend, is gone.”

Previously, Marchionne had planned to retire early next year. Fiat Chrysler named Mike Manley, long-time head of the Jeep brand, as Marchionne’s immediate successor.

But his inability to achieve his ultimate goal at Fiat Chrysler won’t tarnish the remarkable legacy of Marchionne’s nine years at the helm of America’s No. 3 automaker. Marchionne’s determination, savvy and overall leadership acumen plucked Chrysler out of bankruptcy in 2009 and ensured that the company not only would survive but would make the subsequent decade the most prosperous era of its storied, rollercoaster history. Moreover, Marchionne did it in an unconventional way—a lesson in leadership for CEOs across all industries.

In the midst of the Great Recession and $4-a-gallon gasoline in 2009, Marchionne had a lot to sort out after he persuaded the U.S. government to give Fiat the carcass of Chrysler. The former accountant figured that the combination of the two companies encompassed enough viable brands, and would present sufficient economies of scale, to be able to compete with global automotive behemoths as the car-sales recovery gained steam.

Early on, Marchionne came to a few important conclusions and lined up his strategy behind them. Thin on worthy existing products and promising new ones, Marchionne relied on remarkable marketing to create consumer confidence in a Chrysler enterprise that had always been sort of unreliable. He sharpened the Jeep and Ram franchises, and now they supply nearly all of the company’s sales and profits.

“Marchionne’s biggest apparent failure was in not being able to persuade General Motors or Volkswagen to undertake a merger with Fiat Chrysler.”

Marchionne filled Fiat Chrysler’s shaky talent pipeline with some unlikely bets, developing  a number of executives who’ve risen to the top of the company – including Manley, who helmed the Jeep brand and helped make it a new global powerhouse. And as consumers in the U.S. pivoted sharply toward utility vehicles and away from traditional cars over the last few years, Marchionne became the first CEO of a major automaker to pull his company out of production of mainstream sedans.

Indeed, Marchionne was not a CEO who simply rolled with conventional wisdom. He famously embraced black sweaters as his business dress of choice, rather than a suit and tie. He displayed an uncommon candor and wit for someone in his position. And while Fiat Chrysler lately has made stronger efforts in electric vehicles and automated vehicles, Marchionne was one of the few industry chiefs to express strong skepticism about whether either technology was worthy of all the investments being made early on by Fiat Chrysler’s rivals.

Handicapped by legacy problems with product quality, and hamstrung by difficulties such as Chrysler’s own diesel-emissions scandal, Marchionne left some important things unaccomplished. He couldn’t really achieve the integration of Fiat Chrysler’s European and North American manufacturing and product development that he had hoped. Neither was Marchionne able to get Americans interested in the Italian brands, Fiat and Alfa Romeo, on which he was hoping to expand the company’s franchise in North America.

Marchionne’s biggest apparent failure was in not being able to persuade General Motors or Volkswagen to undertake a merger with Fiat Chrysler. He thought this would be necessary in an industry that remains top-heavy with capacity and where demands for investment in electrification and automated-driving technologies could sink any but the biggest and strongest.

But after many years of uncertainty for Chrysler under the ownership of Daimler AG and then as the plaything of the Cerberus private-equity outfit, Marchionne became the company’s most dynamic and successful leader since another charismatic man of Italian descent, Lee Iacocca, in the 1980s. Marchionne’s tenure as CEO of Fiat Chrysler also will be remembered as one that gave the company a fighting chance again and can be an inspiration for CEOs everywhere.

Read more: “Fiat Chrysler Will Be A Top Performer,” CEO Sergio Marchionne Promises