Wednesday, May 6, 2009


It will be a tall order for FIAT's CEO Sergio Marchionne to mold FIAT, Chrysler and Opel into a viable entity. In the world of financially-troubled companies, the merger of broken companies is often fills the pipeline of future work for restructuring professionals.

Coincidentally, I have followed Marchionne's moves for the past five years as a result of living in London when he took over FIAT. I thought it was great that a non-auto executive was brought in to run FIAT. I liked the way he out maneuvered GM to force GM to pay $2 billion in 2004 to FIAT to buy its way out of owning FIAT. (How ironic that 5 years later FIAT is saving (?) Chrysler.) I followed his innovative moves to enter into various joint ventures with companies around the globe. He flattened FIAT's organization and he drove new car development to quicker turnaround times. He improved the quality, performance and curbside appeal of FIAT's and Alfa Romeo's auto lines.

But now, he must take Chrysler, which is broken and operating far from break-even, Opel, which is also broken and being abandoned by GM and FIAT, which in case you look, is also operating at a loss. He will have to do this during the worst period in the auto industry in 70 years.

He will have to merge different companies, different cultures, different manufacturing processes, different information systems, different capital structures, different operating policies across different countries with different governments weighing in on how their country is being treated. And he has to do all of this with a finite amount of financial resources and limited management and leadership resources.

This will be extremely interesting to watch from a leadership standpoint. I recommend following the saga through the Financial Times. I hope Marchionne succeeds because he dares to be different. One way or the other, Sergio will be smoking more cigarettes, downing more espresso.

Cheers, Mike


  1. Knowing the man personally, I can bet the farm that he will go down in the history books for his no nonsense approach and personal integrity as far as accountibility is concerned. He's displayed this quality diligently for as long as I've known him. "In bocca al' lupo Sergio"
    Michael L. Toronto

  2. Michael, I agree "good luck Sergio".

    Cheers, Mike