FCA has named Mike Manley as the company’s new CEO with the sudden and unexpected news of a health crisis for Chairman and CEO Sergio Marchionne.
Manley, 54, takes over the job immediately, initially as interim chief until an emergency board meeting can make the succession official. It is a move that was not supposed to be announced or take effect until next year when Marchionne planned to retire. Marchionne was also CEO of Ferrari which had been spun off of FCA. Ferrari said Louis Camilleri, former chairman of Philip Morris International, will take over as CEO.
Marchionne developed complications following surgery in Italy and his health took a turn for the worse, making the corporate news necessary. Marchionne is 66 and was recovering from a shoulder injury.
“With reference to the health of Sergio Marchionne, FCA communicates with profound sorrow that during the course of this week unexpected complications arose while Mr. Marchionne was recovering from surgery and that these have worsened significantly in recent hours,” the company said in a statement today. “As a consequence, Mr. Marchionne will be unable to return to work.”
Manley was considered a top candidate to replace Marchionne next year. His credentials include running the profitable Jeep and Ram brands and he also built the company’s presence in Asia. Another top contender was Richard Palmer, the chief financial officer.
As thoughts go out to Marchionne and his family, John Elkann, Chairman of Exor, released a statement. “I am profoundly saddened to learn of Sergio’s state of health. It is a situation that was unthinkable until a few hours ago, and one that leaves us all with a real sense of injustice. My first thoughts go to Sergio and his family.”
The two men have worked together for 14 years; Marchionne became CEO of Fiat in 2004. While they did not always agree, Elkann watched Marchionne create the company now known as FCA from the partnership of an ailing Fiat and a bankrupt Chrysler in 2009 that needed a business partner as a condition of exiting bankruptcy protection.
Marchionne managed to take two ailing companies and return them to profitability. Evidence of that: last month at an event to release the company’s next five-year business plan, the sweater-wearing CEO wore a tie to signal he had paid down the debt, as promised. It was a feat many did not think possible and sets up the automaker well to implement the new plan that takes FCA through 2022.
Elkann, the grandson of Fiat founder, the late Gianni Agnelli, said, “What struck me about Sergio from the very beginning, when we met to talk about the possibility of him coming to work for the Group, even more than his management skills and unusual intelligence, were his human qualities, his generosity and the way he understood people. Over the past 14 years together we have lived through successes and difficulties, internal and external crises, but also unique and unrepeatable moments, both personal and professional. For so many, Sergio has been an enlightened leader and a matchless point of reference. For me, he has been someone with whom to share thoughts and in whom to trust, a mentor and above all a true friend.”
Marchionne, an Italian as well as a Canadian, is steeped in economics as well as philosophy and held a law degree. He likes to quote poets and philosophers in corporate speeches and the audiophile often plays his own soundtracks ahead of press conferences and earnings calls. He was also known for living on cigarettes, espresso, and little sleep for most of his career.
He has loomed larger than life for his outspoken comments, provocative ideas and moves in the industry as he forecast the end of cars and the inability of automakers to finance today’s tech without economies of scale which led to his unsuccessful efforts to merge with General Motors.
“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,” Elkann said.
Marchionne also had a team of leaders who were being groomed to take over the top job to allow for a transition that was to take effect next year. Manley likely did not know he was the chosen one as Marchionne had told reporters repeatedly that the new CEO would be told at the last minute.
Elkann said because of the succession plans in place, there will be a smooth transition.
“It has been my privilege to have had Sergio at my side for all these years,” Elkann said in asking for respect for Marchionne’s privacy at this time.
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