Wheels Newsmaker of the Year: Sergio Marchionne

By all accounts, the CEO of Fiat is a hard taskmaster. He works all the time and expects his managers to do the same. He carries five cellphones to keep track of all the companies he heads. He has two corporate aircraft at his disposal and maintains homes and busy offices in both Michigan and Italy. He wakes at 3:30 in the morning and tries to go to bed at 10 at night, seven days a week.

In 2012, he toughed home an auto contract for Chrysler with the Canadian Auto Workers union and gave a presidential hopeful a tongue-lashing, which helps to make Sergio Marchionne Wheels’ Newsmaker of the Year.

What sets him apart from other managers?

“I think it’s charisma,” says Joseph D’Cruz, professor emeritus of strategic management at Toronto’s Rotman School of Management. “He’s got a lot of charm and when he chooses he can turn it on, but underneath it all there’s steel.”

Marchionne, now 60, learned a lot of his technique in Toronto, where his family moved when he was 14 years old; his father was a senior police officer in Chieti, Italy, who wanted to ensure a good education for his children. Young Sergio excelled, earning a law degree from Osgoode Hall and an MBA from the University of Windsor. He took on various financial management positions and was promoted all the way up to the board at Fiat, where the ailing company gambled in 2004 and made him CEO. Marchionne changed its entire top-down executive structure and turned the company around in 18 months.

Now he’s done the same thing at Chrysler, in which Fiat bought a majority ownership in 2009. Under his direction, the company went from bailout basket-case to profitability, and paid off its $7.6 billion in government loans in less than two years.

Marchionne did not respond to requests for an interview with Wheels, but in September he described Chrysler’s revival to the TV news show 60 Minutes. “I remember when I came here in 2009,” he said. “There’s nothing worse for a leader than to see fear in people’s faces. It’s been a long, rocky road, but the fear is gone. There’s nothing worse in life than to sit there and be the victim of a process that’s outside your control.”

As CEO now of Chrysler, he’s very much in control, wherever he may be in the world.

“One thing about Marchionne — he’s hands-on, and I know he’s always just a phone call away,” says Ken Lewenza, the president of the Canadian Auto Workers who hammered out the Canadian contract this year for 8,000 Chrysler unionized employees.

During the entire negotiating period, Marchionne was at Fiat’s Italian head office in Turin, but Lewenza says the CEO was in direct contact with his team and aware of everything on the table. This year, unlike Ford and General Motors, Chrysler did not agree to create new jobs.

“Marchionne is absolutely hands-on, and when it comes to the decision-making process, he’s got to give the final stamp,” says Lewenza. “There’s no doubt about that.

“He’s very focused on product quality — which the union always was, though sometimes it fell on deaf ears; he’s focused on design; he’s focused on how you grow market share. Admittedly, what makes or breaks a company is product, and he spends a hell of a lot of time — I tell you, a hell of a lot of time — with his product development team.”

Chrysler’s new vehicles are influenced by the European-styled cars that Fiat sells, which include the exotics of Ferrari and Maserati. Marchionne invested much of the government’s bailout money in domestic research and development, says D’Cruz, adding that “he seems to have a flair for deciding what kind of design strategy Chrysler needs to follow. In the last few years, the designs have improved significantly, and he’s brought an Italian flair to them.”

The affordable Dodge Dart and the SRT Viper supercar were both introduced this year and there are more in the pipeline. In 2014, Alfa Romeo’s sexy sportscars are expected to return to the U.S., though this is not yet confirmed for Canada.

Production is ramping up throughout the company, including at Jeep, although former U.S. presidential hopeful Mitt Romney suggested in an October campaign ad that Jeep assembly lines would soon be moved to China. U.S. President Barack Obama, “sold Chrysler to Italians who are going to build Jeeps in China,” said the Ohio ad, which promised to protect American jobs.

Marchionne was swift to react, telling employees in a letter that U.S. Jeep employment had tripled since Fiat bought into the brand, and local assembly lines in China would have no effect on American assembly, which will “remain in operation in the United States and will constitute the backbone of the brand. It is inaccurate to suggest anything different.”

Workers cheered his charismatic confidence in their product. Lewenza, however, is a bit more practical in his assessment of Marchionne.

“I don’t know if it’s charisma — I would say it’s stamina right now,” he says.

“He’s a global CEO who’s going through incredible pressures in Europe. He’s publicly challenged the European auto industry to restructure. It’s no secret that in Italy he’s not seen as being as popular as in North America.”

But in 2012, Marchionne succeeded in what he set out to do — and did so with very little sleep.

“I think that what he’s done is empower confidence in his top management team and they’re producing the results based on good leadership,” says Lewenza.

“I don’t think one man in isolation can save a company, but he certainly deserves credit for playing the lead role in doing so.”
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