Published on December 16, 2013

Timing of Marchionne’s departure murky at Chrysler-Fiat

(Crain News Service photo)
“I could be here in 2016. I’m not going to do anything else after this from an executive standpoint. I’ve had my fill of turnarounds. I’ve done more than most human beings should.” Sergio Marchionne said in a January 2013 interview.

By Larry P. Vellequette, Crain News Service

DETROIT (Dec. 16, 2013) — General Motors Co. has a new leader in place, and Ford Motor Co. has one waiting in the wings.

But as the CEO succession spotlight turns to Chrysler-Fiat, it is still anybody’s guess who will replace Sergio Marchionne, and what kind of management structure the company will install when the indefatigable Italian executive steps down.

With Chrysler Group L.L.C. in a federally imposed quiet period because of its initial public offering, the company is officially mum on who comes next or when. Chrysler spokesman Gualberto Ranieri declined to comment.

But one thing is clear: Whomever is chosen will have some big and well traveled Italian leather loafers to fill, and much work still to be done.

Fiat and Chrysler still are not fully integrated and have separate management structures that report to a 20-member steering committee called the Group Executive Council. Mr. Marchionne, 61, is head of Chrysler and Fiat S.p.A., Chrysler-Fiat’s North American region, as well as other Fiat-owned companies.

That structure could remain as-is, or the top jobs could be split among two or more people.

The latest word on Mr. Marchionne’s replacement came in an interview with the French weekly magazine Le Point, published in October. Mr. Marchionne said that his “successor is among” the 20 members of Chrysler-Fiat’s Group Executive Council, according to a translated copy of the interview.

Pressed for more clues, Mr. Marchionne would say only that his successor is “in a small group of five people.”

The Chrysler-Fiat Group Executive Council meets monthly, either in Italy, the U.S., or occasionally in Brazil or China, and approves strategies and investments for both auto makers and associated operations.

About half of the council is made up of Chrysler executives, though several wear multiple hats in Mr. Marchionne’s management structure. The remainder come from Fiat’s top executive ranks.

High-powered 20 group

The Chrysler-Fiat Group Executive Council has 20 members who share decision making for the two auto makers. Sergio Mr. Marchionne has said his successor is on the council.

Executive Responsibility:

Sergio Marchionne, CEO—NAFTA

Alfredo Altavilla—Europe, Middle East, Africa—Business Development

Cledorvino Belini—Latin America

Mike Manley—Asia-Pacific—Jeep brand

Riccardo Tarantini—Systems & castings

Eugenio Razelli—Components, Magneti Marelli

Olivier Francois Fiat—chief marketing officer

Harald Wester—chief technology officer, Alfa Romeo/Abarth/Maserati

Reid Bigland—Ram

Pietro Gorlier—Parts and Service, Mopar

Lorenzo Ramaciotti—Design

Stefan Ketter—chief manufacturing officer

Scott Garberding—group purchasing

Doug Betts—Quality

Bob Lee—powertrain coordinator

Mark Chernoby—product portfolio management

Richard Palmer CFO—Fiat and Chrysler

Linda Knoll—human resources

Alessandro Baldi—chief audit officer and sustainability

Michael Keegan—GEC chief of staff

    Source: Chrysler-Fiat

 

At least four among the 20 stand out as potential successors to Mr. Marchionne, based on their success in the organization and their experience.

• Mike Manley, 46, has matched or exceeded Mr. Marchionne’s brutal travel and work schedule over the last five years, while leading the Jeep brand to record global sales. He also has boosted Chrysler-Fiat’s presence in the important Asia-Pacific region, for which he has responsibility.

• Alfredo Altavilla, 50, widely considered Mr. Marchionne’s right-hand man at Fiat, is responsible for operations in Europe, Africa and the Middle East. He has been with Fiat since 1990 and has headed Fiat operations in several regions of the world and in different parts of the company.

• Reid Bigland, 46, has distinguished himself as head of U.S. and Canadian sales, with nearly four years of consecutive monthly sales gains in both countries. He also seamlessly took over the reins of the highly profitable Ram brand in April when former Ram boss Fred Diaz went to Nissan. Mr. Bigland is a former CEO of Freightliner Custom Chassis Corp.

• Richard Palmer, 47, an Englishman who is CFO of both Chrysler and Fiat, understands Chrysler and Fiat’s interdependent operations and finances. Palmer has been a CFO with Fiat or a subsidiary since 2003.

Mr. Marchionne has hedged on when he might step aside. At the 2012 Detroit auto show, he was unequivocal in an interview with Automotive News: “No earlier than 2013, no later than 2015.”

Yet just a year later, that firm date seemed to slip.

“I could be here in 2016,” Mr. Marchionne said in a January 2013 interview. “I’m not going to do anything else after this from an executive standpoint. I’ve had my fill of turnarounds. I’ve done more than most human beings should.”

This year, at a meeting of Exor, the Agnelli family investment company that controls Fiat and Fiat Industrial, Chairman John Elkann said Mr. Marchionne would likely stay beyond 2015.

“Mr. Marchionne has spoken about 2015 as the date of his exit [from Fiat] because he thinks many things will have been completed by then,” Mr. Elkann told the meeting. “But having spoken to him, I’m convinced that he will stay with us for many more years.”

 

This report appeared in Automotive News, a Detroit-based sister publication of Tire Business.

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