Fiat Chrysler Automobiles on Saturday appointed the head of its Jeep brand as its new chief executive in an unexpected move to replace the ailing Sergio Marchionne, who engineered the merger of Fiat and Chrysler and led the combined company for nearly ten years.
Fiat Chrysler’s board named Mike Manley as CEO and said that Marchionne wouldn’t be able to return after suffering complications from a surgical procedure earlier this month. The move comes months ahead of Marchionne’s planned departure early next year and just weeks after he announced a strategy through 2022 to boost the company’s global sales volume and profitability.
Manley, 54, joined predecessor firm DaimlerChrysler AG in 2000 and has led Jeep since Chrysler LLC exited bankruptcy nine years later under the deal with Fiat. The iconic sports utility brand has been one of Fiat Chrysler’s strongest performers, helping underwrite the company’s steady recovery in profitability.
The new CEO will take over at a time when Fiat Chrysler boasts a strong balance sheet but is nursing a reputation tarnished by regulatory crises involving safety lapses, suspected emissions cheating and bribery allegations. The accelerated succession may also rekindle speculation the auto maker may seek to sell off all or part of itself. Marchionne once sought such a deal but, more recently, had abandoned the idea.
Fiat Chrysler Chairman John Elkann said the move was “unthinkable until a few hours ago” but would provide stability for the company.
“The succession plans we have just announced, even if not without pain from a personal point of view, mean we can guarantee the maximum possible continuity, preserving our companies’ unique cultures,” Elkann said.
Marchionne, who is 66 years old, had said he planned to step down as CEO early next year but continue to serve as chairman and chief executive of Ferrari NV, which was spun off from Fiat Chrysler and became an independent company in 2016.
Ferrari said separately that Elkann would take over Marchionne’s role as chairman at the luxury sports car maker. Fellow board member Louis Camilleri, chairman of Philip Morris International, would succeed Marchionne as CEO of Ferrari.
The Italian-American auto maker hasn’t specified the nature of Marchionne’s illness but said earlier this month that he had an operation on his right shoulder. Company officials have said privately that he has been absent from his day-to-day role at the company for weeks.
A workaholic known for making blunt comments and wearing black sweaters instead of formal business attire, Marchionne has been an outsize presence in the auto industry. Under his watch, Fiat Chrysler confounded critics on Wall Street and elsewhere by meeting most debt-reduction and profit targets.
Fiat Chrysler largely delivered on profit goals outlined in its last strategic plan, which dates back to 2014, and were triple what some analysts projected. The company’s stock price has nearly quadrupled since then and its healthy 6 percent profit margin is higher than crosstown rival Ford Motor Co.’s 5.2 percent margin and approaching General Motors Co.’s 7.2 percent.
Manley hasn’t made a statement, but a company spokesman said he would be on a call with financial analysts next week after Fiat Chrysler releases its earnings report for the second quarter.
Source: The Wall Street Journal
