FCA picks Mike Manley, head of Jeep, Ram, to replace Marchionne
Fiat Chrysler Automobiles NV appointed a new CEO on Saturday, after the health of long-time leader Sergio Marchionne deteriorated due to complications after surgery.
Mike Manley, formerly head of the Jeep and Ram brands, will take over as CEO of the Italian-American company effective immediately.
"Fiat Chrysler Automobiles NV 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 automaker said in a statement. "As a consequence, Mr. Marchionne will be unable to return to work."
FCA Chairman John Elkann said in a somber statement he is "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."
Company representatives declined to go into detail about the complications Marchionne was experiencing, or exactly how serious the complications were. According to Italian media, he is hospitalized in Zurich.
“The iconic reign of Sergio Marchionne is over at FCA," said Rebecca Lindland, senior analyst at Kelley Blue Book. "Mike Manley is a very worthy replacement, with his global expertise and experience running Jeep, especially the highly successful launch of the Jeep Wrangler this year. While running FCA is a wider, broader job than running Jeep and Ram, Manley has been a loyal and worthy lieutenant to Marchionne for years."
Marchionne, a 66-year-old native of Chieti, Italy, had been out on medical leave for the past several weeks after surgery on his right shoulder. The automaker announced Saturday that he will not return to his roles at Fiat Chrysler or at Ferrari NV.
Manley, 54, was appointed head of the Ram brand in 2015. He has also been head of Jeep brand since 2009. According to the company website, Manley was previously chief operating officer of Asia, and ran international sales and global product planning for the company. He was born in Edenbridge, Great Britain.
Manley takes the helm just more than a month after Marchionne announced the automaker would lean on the Jeep and Ram brands as it aims to be the most-profitable automaker by 2022.
"Mike Manley is a logical, solid choice to replace Marchionne in light of the success of Jeep and FCA’s future being dependent on the success of Jeep and other global brands," said Michelle Krebs, analyst with Kelley Blue Book.
Marchionne’s health condition sped up the timeline for a succession decision at an emergency meeting Saturday in Italy. He had already announced he was planning to leave by early next year.
Marchionne, known for his rumpled sweaters and nonstop work habits, is one of the longest-serving CEOs in the auto industry. He was appointed in 2004 as the fifth Fiat chief in a two-year period. He managed to return the carmaker to profit in 2005 by cutting costs, laying off workers and then looking for a partner. The company had lost more than 6 billion euros ($7.04 billion) in 2003.
With the acquisition of Chrysler in 2014, completing a five-year process, he gave Fiat the global scale needed to survive. Still, as the world’s seventh-largest automaker, the company may lack the size it needs to compete in an industry being reinvented by the emergence of autonomous driving and electrification.
Marchionne led a 14-year turnaround of the company. In his time as CEO, he saved both of the namesake brands from oblivion, ushered Chrysler from Chapter 11 bankruptcy, revived Alfa Romeo in the United States and is expected to slash net industrial debt to zero.
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Marchionne said in early June while laying out the road map for the future of the company that his mission at the company was complete, and his successor would inherit a plan already in motion to make FCA the most profitable automaker in the U.S. by 2022.
"The bulk of this business is producing earnings which are almost genetically predetermined," Marchionne said then, "because of decisions that have been made in the past and which are now being executed in a market where that call has been made. The reality is 80 percent of the earnings of this house in 2022 are only going to come from the four brands that we heard about today."
Those plans include efforts to leverage the highly profitable Jeep and Ram brands in the U.S. and abroad with higher-margin products that fill holes in their respective portfolios.
FCA plans to deploy some $52.5 billion (45 billion euros) in capital expenditure over the next five years to achieve its 2022 goals.
With elimination of net industrial debt and the revenue and profit potential of a planned financial lending arm, FCA is also targeting between $10.7 billion (9.2 billion euros) and $12.1 billion (10.4 billion euros) in pre-tax earnings in 2020. That's projected to grow to a range of $15.2 billion (13 billion euros) to $18.7 billion (16 billion euros) in 2022 with profit margins between 9 percent and 11 percent.
These targets arguably would have been unthinkable in the depths of bankruptcy nearly a decade ago. And the magnitude of FCA's turnaround is not lost on the 65-year-old Marchionne.
Marchionne’s last public appearance was June 26, when he spoke at an event in Rome. The company said on July 5 that the CEO underwent an operation on his right shoulder and was expected to require “a short period of convalescence.”
In recent months, he was preparing to slow down but wanted first to complete the five-year plan to rid the carmaker of industrial debt, making it financially stronger and able to survive the next downturn. "I am a fixer," he said. "Until something is definitively fixed, I can’t stop," he has said.
Ferrari said Louis Camilleri, an Egypt-born Maltese and longtime executive at tobacco company Philip Morris International, would replace Marchionne as CEO of the sports car maker. The board named John Elkann, grandson of the late Gianni Agnelli, the longtime Fiat dynasty chieftain, to succeed Marchionne as Ferrari chairman.
Detroit News staff writers Nora Naughton and Keith Laing, and wire reports contributed