Sergio Marchionne, who led Fiat Chrysler to prosperity in the face of a stubborn recession and a host of other challenges, has died. He was 66. Just days ago, he stepped down from his role leading one of the world's largest car companies because of health problems.
Fiat Chrysler rushed to name a new CEO last weekend after it became clear that Marchionne would not be able to return to work. The widely admired executive had suffered complications from shoulder surgery, and his health rapidly deteriorated. He died at University Hospital in Zurich.
Marchionne was a visionary at a time when the auto industry was sorely in need of one.
He became Fiat's chief executive in 2004. The company had been hemorrhaging billions of dollars annually. Marchionne brought it back to profitability in just one year, recording income of nearly 1.5 billion euros in 2005. In the process, he slimmed down Fiat and sliced away many of its debts.
Five years later, Marchionne became the CEO of the combined Fiat Chrysler company, as U.S. carmakers were struggling to escape the fallout of a crisis in the credit and housing industries and a growing recession.
The car that turned it all around for Chrysler, he said, was the 2010 Jeep Grand Cherokee.
"Because it was unexpected," Marchionne said in a 2013 interview with NPR. "It was of a quality that nobody thought that Chrysler could produce."
The cars that followed, he said, were simply refinements, as the company embraced what he called "a process of commitment to quality and to excellence."
It was a sharp turnaround for Chrysler, which had been near death when the U.S. government stepped in to save it in March 2009. It was then put under Fiat's control.
As Dustin Dwyer reports for NPR, "Fiat Chrysler repaid the billions of dollars in U.S. government loans six years ahead of schedule and with interest. Nearly everyone credited Marchionne."
Under Marchionne's guidance, Fiat Chrysler has enjoyed huge gains in its long-popular Jeep brand, and it built on the Dodge Challenger (reintroduced in 2008) to become a player in the resurgent muscle car market. The company also brought Fiat cars back to North America. The Fiat 500 compact became a success story – even ferrying Pope Francis around during his U.S. visit. More recently, it began selling Alfa Romeo cars in the North American market again.
Other gains were reflected in the company's healthy balance sheets and in its corporate strategy. Fiat Chrysler obtained 100 percent ownership of Chrysler in 2014; two years later, it spun off its Ferrari brand. The automaker has also expanded into important markets – building Jeep Cherokees in China and the Jeep Compass in India.
Discussing how he changed the culture at Chrysler, Marchionne said in 2013 that he believed if a business has become dysfunctional, "the real problem sits at the top," so, he added, "we changed all of the senior leadership of Chrysler within a matter of a couple of days."
The company also reshaped its approach to making cars, he said, with a strong emphasis on reducing wasted effort and improving ergonomics to make the manufacturing plant "livable."
"One of the things that unfortunately happens in organizations that become dysfunctional," Marchionnne said, "is that the very first thing to go is the amount of care and attention that you place on the workplace and the environment within which people work."
Fiat pushed that change on Chrysler — and everyone benefited, he said.
When it was announced that Marchionne's failing health would force him to step aside, John Elkann, the heir to legendary Fiat boss Gianni Agnelli, issued a statement about the man he called "a mentor and, above all, a true friend." Today, Elkann said, "Unfortunately, what we feared has come to pass."
Discussing Marchionne's legacy last week, Elkann wrote:
"He taught us to think differently and to have the courage to change, often in unconventional ways, always acting with a sense of responsibility for the companies and their people.
"He taught us that the only question that's worth asking oneself at the end of every day is whether we have been able to change something for the better, whether we have been able to make a difference."
Fiat Chrysler is now led by new CEO Michael Manley, the former head of its Jeep division.
"There is no doubt that Sergio was a very special, unique man," Manley said Wednesday morning on a conference call with investors. "And there is no doubt that he's going to be sorely missed."
Born in Italy, Marchionne attended high school and college in Canada, where his family immigrated when he was a teenager. He studied philosophy and law — but he also got degrees in business and commerce, setting him on a career path that wound its way from Canadian accounting firms to SGS, a Swiss testing and certification company, and finally to Fiat.
Marchionne's death was announced on the same day that the company he nursed back to health reported its quarterly earnings. The results include an adjusted net profit of more than $1.1 billion in the second quarter of 2018 — a drop of 9 percent from 2017.
The company lowered its expectations of profits for this year, but it also met another one of Marchionne's goals, by ridding itself of net industrial debt.