17 June 2016

Sergio Marchionne - business leader

Man who saved Fiat divides opinions in Italy

Photo of Sergio Marchionne
Sergio Marchionne became chief
executive of Fiat in 2004
Controversial business leader Sergio Marchionne was born on this day in 1952 in the city of Chieti in the Abruzzo region of Italy.

The 64-year-old chief executive of Fiat Chrysler Automobiles is credited with saving the iconic Italian motor manufacturer from potential extinction in 2004, when Fiat was on the verge of being taken into the ownership of the banks that were keeping it afloat.

It had suffered cumulative losses of more than $8 billion over the previous two years and a strategic alliance with General Motors had failed. Its share of the European car market had shrunk to an historic low of just 5.8 per cent.

Yet after the little known Marchionne was appointed chief executive at the company's Turin headquarters it took him only just over a year to bring Fiat back into profit.

When Fiat opened a new assembly line at the Mirafiori plant outside Turin in 2006, Marchionne was hailed as a hero.  The inauguration celebrations were attended by politicians of all parties and trade union leaders.  Soon, the new Fiat 500 was launched, tapping into Italian nostalgia by reprising the name that was synonymous with the optimistic years of the 1950s and 60s.

But Marchionne, who had left Italy when he was 14 and learned his business skills in Canada and Switzerland, in time antagonised the more hard-line unions with the changes he introduced to working conditions.

His popularity was not helped when ambitious plans for a 20 billion euro five-year investment in Fiat in Italy, which would have given jobs back to most of the workers laid off during the crisis years, were abandoned. Marchionne blamed the collapse of the European car market.

His standing dipped further in 2014 when he merged Fiat with Chrysler, the American company he had rescued from bankruptcy in 2009, and Fiat became a subsidiary of Fiat Chrysler Automobiles, a multi-national company with its administrative headquarters in London.

Photo of old and new Fiat 500s
A 1966 Fiat 500 with its modern incarnation, built
 after Marchionne relaunched the model in 2006
The new company had more employees in North America and Mexico (34 per cent) than in Italy (29 per cent) and apart from fears over jobs for Italians, there was opposition from traditionalists to the idea of Fiat losing its Italian identity.

The company, founded by Giovanni Agnelli in 1899 and always based in Turin, is seen as an Italian institution, an important part of the country's industrial heritage.

Marchionne prefers to describe the company as having many bases, with factories and offices in Canada, India, Mexico, Brazil, Argentina, Poland and China as well as Italy and the United States. He spends much of his time flying between them.

His global outlook might owe something to his own multi-national heritage.  His mother hailed from Istria, the peninsula in Croatia that used to belong to Italy, and met his father, from Abruzzo, when the latter was serving in Istria as a carabiniere officer.

They moved to Chieti in 1945 and decided to relocate to Canada in 1966, joining relatives in Toronto. Marchionne has degrees in philosophy, commerce and law, is qualified as an accountant and a barrister, holds dual Canadian and Italian citizenship and is fluent in Italian and English.

Before joining Fiat he was chief executive of a company in Switzerland, where he has a home.  He has a passion for fast cars -- he is also chief executive of Ferrari -- and classical music but has managed largely to keep his private life out of the public gaze.  His wife and two sons live in Switzerland.

UPDATE: Marchionne died in Zurich in July 2018 at the age of 66.

Photo of Gothic Church in Chieti
The Gothic Cathedral in Chieti
Travel tip:

Chieti is among the most historic Italian cities, supposedly founded in 1181BC by the Homeric Greek hero Achilles and was named Theate in honour of his mother, Thetis. Among its main sights are a Gothic Cathedral, rebuilt after earthquake damage in the 18th century on the sight of a church that dates back to the 11th century.

Travel tip:

The former Fiat plant in the Lingotto district of Turin was once the largest car factory in the world, built to a linear design by the Futurist architect Giacomo Matte Trucco and featuring a rooftop test track made famous in the Michael Caine movie, The Italian Job. Redesigned by the award-winning contemporary architect Renzo Piano, it now houses concert halls, a theatre, a convention centre, shopping arcades and a hotel, as well as the Automotive Engineering faculty of the Polytechnic University of Turin.

More reading:

Vittorio Jano - motor racing engineer who helped put Ferrari on the map

Enrico Piaggio - man behind the iconic Vespa

Daniela Riccardi - leading Italian businesswoman

(Photo of Sergio Marchionne by Ricardo Stuckert CC BY-SA 3.0 br)
(Photo of Fiat 500s by dave_7 CC BY-SA 2.0)
(Photo of Cathedral in Chieti by Raboe001 CC BY-SA 2.5)


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