Fiat Chrysler CEO sure carmaker can survive tech disruption

The transaction values Magneti Marelli, a diversified parts maker that specialises in lighting, powertrain and electronics, at 6.2 billion euros ($7.14 billion), excluding debt, one of the sources said.

MILAN: Fiat Chrysler Automobiles NV is a “house of brands” and that ensures it will be one of the few traditional automakers to survive the disruption the car industry is facing from the rise of electric and self-driving cars, according to chief executive officer Mike Manley.

Manley’s vision, like that of his iconic predecessor Sergio Marchionne, is based on the view that distinctive brands such as Jeep, Alfa Romeo and Maserati give the Italian-American company an advantage over mass volume producers.

Manley, 55, who succeeded Marchionne in July a few days before he died, is under pressure to deliver a turnaround of the carmaker’s unprofitable Asia business and revamp its European one amid massive investments needed to guide Fiat-Chrysler into the era of self-driving electric cars and new mobility services.

“I’m 100 % sure” that Fiat Chrysler will be able to survive because “we are fundamentally a house of brands,” Manley said in an interview last month at the company’s Turin headquarters for a new biography of Marchionne.

In his last sit-down interview in January 2018 at his mansion in Michigan, Marchionne predicted that carmakers have less than a decade to reinvent themselves or risk becoming commodities amid a seismic shift in how vehicles are powered, driven and purchased.

The industry will divide into segments, with premium brands managing to hold onto their cachet while mere people-transporters struggle to cope with the onslaught from disruptors like Tesla Inc and Google’s Waymo, Marchionne said at the time. He warned that the namesake Fiat brand is the one more at risk of being “commoditised” inside its portfolio of products.

“I don’t think that we have any brand that will fit into a bland character,” Manley said in the interview. He believes the Fiat brand has a future, citing the success of its iconic 500 subcompact, which posted record deliveries after a decade on the market. “Our brands have shown they will be able to survive.”

Pietro Gorlier, who leads Fiat Chrysler in Europe, echoed Manley’s outlook in a separate interview for the book at his Mirafiori office in Turin.

He sees the Italian brand having a bright future in Europe with its 500 family, which also includes the 500X SUV, and by developing the “concept of mobility.”

At the Geneva car show in March, Fiat unveiled the Centoventi prototype, a battery-powered electric car that can be fully customized by clients and could be Fiat’s answer for urban mobility services like robo-taxis or ride-hailing services.

Manley has signaled in the last few weeks that Fiat Chrysler is open to explore ways to cooperate or even merge with other carmakers. Fresh talks with Peugeot have begun for joint investments, people familiar with the matter have said. When asked if Fiat was holding talks with the French carmaker for a deal, Manley declined to comment.

The Fiat Chrysler CEO spoke in a joint interview with chief financial officer Richard Palmer for the book “Sergio Marchionne,” which will be published April 30 in Italian by Sperling & Kupfer.

The book revealed that Palmer and Manley were the two candidates that Elkann had planned to propose to the board of directors July 21, after he discovered that Marchionne was never going to come back after a surgery he underwent few weeks before.

In those dramatic hours, Palmer took himself out of the race, clearing the way for the head of Jeep, Fiat’s most valuable unit.

So Elkann proposed Manley, who’d led the revival at Jeep, where sales rose to more than 1.6 million in 2018 from 300,000 in 2009. Palmer declined to comment on the matter.

Palmer, who stayed on as CFO and was appointed to the board, is working closely with both Manley and Elkann on Fiat Chrysler strategy. He also has a new responsibility for mergers and acquisitions.

Palmer said everyone who worked with Marchionne was “enriched” by the experience. “Marchionne didn’t think of himself as an executive, he considered himself as a fixer.

He hated long decision-making for an issue, he just wanted to solve it.”

For the CFO, Marchionne’s legacy is an inspiration. “He used to say that leadership is a privilege and he felt the responsibility for the performance of the team and for all the organisation.” — Bloomberg

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