Fiat Chairman Sergio Marchionne and Chrysler

The Italian and Canadian Citizen Rescued the Troubled Turin Carmaker

Apr 16, 2009

Sergio Marchionne, an aggressive Italian-Canadian executive, guided Fiat from near bankruptcy to multi-millon dollar profits. Some experts say he could save Chrysler.

Early in 2009, the Obama Administration was counting on Fiat and Chrysler to negotiate a partnership that would rescue America’s third largest automaker. The key player in that proposed deal was Sergio Marchionne, a 56-year-old Italian-born Canadian-educated executive with a reputation for aggressive company rescues and visionary thinking.

Despite the role he might play in rescuing Chrysler, its dealers and suppliers and in saving thousands of jobs, Marchionne was little known in the USA as negotiators worked on the partnership.

Marchionne Totaled his $275,000 Ferrari

Some Americans might have heard of Marchionne in 2007 when he totaled his $275,000 Ferrari 599 GTB by crashing into a Renault on a Swiss highway. But they probably know little more than that. The accident was blamed on the Renault suddenly slowing down in front of the fast moving Ferrari.

In 2009, Dale Buss of EdmundsAutoObserver wrote that Marchionne was "increasingly seen as a visionary who has the guts to shape the industry's future rather than just react to it." He sees the industry heading for a worldwide merging of carmakers, which is said to be one of his reasons for partnering with Chrysler. Another is to gain access to Chrysler’s American dealership network and perhaps a Chrysler manufacturing plant.

Became Fiat CEO in 2004

Fiat was losing millions and reportedly near bankruptcy when Marchionne took over as CEO. According to Buss, Fiat’s share of the Italian market had dropped from 52% to 38%. The company had diversified into insurance, banking and energy, some said at the expense of its core vehicle business. Buss said Marchionne cut about 2,000 Fiat white collar jobs in the Turin area, accelerated the design-to-market process for Fiat vehicles, refused to offer steep car discounts and announced plans to introduce 22 new vehicles by the end of 2008. He also ended a disappointing Fiat partnership with General Motors.

Under Marchionne, Fiat became profitable again by the end of 2006. Its stock price doubled and it paid its first dividend in five years. It gained market share in 2008 despite the overall decline in Italian auto sales. In 2008 he agreed in principle to a proposed Fiat partnership with Chrysler, but in April 2009, as Chrysler faced a two-week deadline to complete the agreement, Marchionne warned that the deal was off unless Chrysler’s United Auto Workers and Canadian Auto Workers agree to cut costs. "We are prepared to walk," he said.

According to his Business Week profile, Marchionne began his career as a chartered accountant and tax specialist for Deloitte & Touche in Canada, then moved through a series of high level corporate positions, landing at Fiat as a director in 2003 and as CEO in 2004. Besides heading Fiat, he has served as chairman and/or CEO at:

Two University of Windsor Degrees

Marchionne has bachelor degrees in commerce (University of Windsor), arts (Toronto) and law (York) and a master’s degree in business administration (Windsor).

Business Week listed Marchionne’s 2008 fiscal year compensation at a bit over $4 million, in US dollars. He was born in Italy, moved to Canada when he was 14 and has maintained a Swiss residence.

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