End of the era Marchionne: the change in continuity for Fiat Chrysler ?

The CEO of Jeep, Mike Manley, designated this weekend as the successor of Sergio Marchionne at the head of the group FCA, in a speech at the auto show in New York on April 12, 2017 (Photo: Drew Angerer. GETTY IMAGES NORTH AMERICA)

The transition was prepared, but the hurried departure of Sergio Marchionne casts doubt on the future of Fiat Chrysler (FCA) and on the capacities of the dauphin designated, the brit Mike Manley, to lead the multinational, yet very Italian.

“The concern for the life of one of the managers of the world’s most esteemed blends with legitimate questions about the future of the 7th automotive group of the world, which has embodied in the history of our country the very idea of modern industry”, wrote Sunday morning Dario Di Vico, a columnist of Corriere della sera, the first Italian newspaper.

While grading on “the end of an era”, the Italian press was a general continuity of the estate: the four officers appointed to resume the many hats of this workaholic to FCA, Ferrari (NYSE:RACE) and CNH Industrial were all already involved in these groups, controlled by the Agnelli family.

Started by Mike Manley, the boss of Jeep, who takes over the reins of FCA. This British discreet arrived at the head of Jeep in the midst of the crisis in 2009 has made it the crown jewel of the group: a Jeep should, according to Morgan Stanley (NYSE:MS) represent almost 70% of the profits of FCA this year.

In a letter sent Sunday to all employees of FCA, its chairman, John Elkann, the grandson of Umberto Agnelli, has expressed his confidence in Mr. Manley.

“We started years ago to work on a succession plan that ensures continuity and preserves the unique culture of the FCA”, he assured. “Mike has been one of the key contributors to the success of FCA, and he has behind him a long list of feats”.

– “Some terrible news” –

For Florian Delègue, headhunter from Heidrick & Struggles specializing in the automotive industry, this appointment is “a good surprise”.

Mr. Manley “is not a newcomer, this is the man to success of the Fiat group”. And even if it is not Italian, “this is a foreign very acculturé to Fiat”.

However, Mike Manley is not Sergio Marchionne, the child of Abruzzo became a Canadian, graduated in law, in management but also in philosophy, who succeeded in conquering politicians, the media and trade unionists, particularly in Italy.

In 14 years, it has profoundly reshaped Fiat, first by straightening and then combined in 2009 to the american Chrysler.

“Without Sergio Marchionne, Chrysler and Fiat would not have survived,” says David Cole, chairman emeritus of the Center for Automotive Research in Michigan, in an interview Sunday with The newspaper, la Stampa, close to the Agnelli family.

“His charisma, his energy, his determination, his qualities of communication and its strategic vision have been essential,” he adds.

This is a view shared by several trade union representatives in Italy. “This is a terrible new”, has responded to the Icftu. “We had different (…) but together we defied the little Italy lazy who prefer to close mills rather than roll up the sleeves”.

– “Important appointments” –

Silence for the moment of the CGIL and of the Imf, who are bitterly opposed to Mr. Marchionne, but even the sound of a bell to the UIL and the Uilm.

“We have often mentioned the extraordinary ability of Marchionne to create value and make a profit, but it has been the same for his ability to safeguard the industrial heritage and jobs,” noted the two unions.

If the group FCA has 159 factories around the world, 27% of its 236.000 employees work in Italy. However, “important appointments await us, such as the assignment of models to the Italian factories and the renewal of the collective contract”, have warned the UIL and the Uilm.

For Ferdinand Dudenhöffer, a researcher specialist of automotive at the university of Duisburg Essen, Mr. Manley is “a man of cars, and to lead Fiat Chrysler, it is not enough”.

In Italy, he will have to “negotiate with the unions, the politicians, the Agnelli family”. “It’s going to have to do a lot of compromise,” and “it will not be able to take bold decisions”.

However, it is daring and the vision that FCA will need to face the challenges that await, starting with the threats of the american president Donald Trump on the trade and the strategy for developing the electric, for which a number of experts point to the necessity of new alliances.

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