5 Things Marchionne Did That Lead To Such A Change In Circumstances For Fiat And Chrysler
“I promise you, we’ll do our best to ensure this pulse continues to beat strong” said Sergio Marchionne, former CEO of Fiat Chrysler Automobiles (FCA), an Italian-American automobile manufacturer. Marchionne passed away on the 25th of July, 2018, few weeks after going through a “routine” shoulder surgery. He is and will be for a long time well known and admired for the way he governed one of the world’s biggest car companies, how he saved Chrysler and Fiat from going bankrupt, and how he brought them together. There were 5 things he did that are seen today as the main actions that lead to such a change in circumstances for Fiat and Chrysler.
The first one of them was in 2009, during the Great Recession, when the auto industry was going through a crisis and Chrysler, a domestic U.S. carmaker, was very close to going bankrupt. To get the company out of that critical situation, he first found a diamond in the rough. Instead of letting the company go bankrupt, he was quick and made a deal in which Fiat would acquire a portion of Chrysler’s ownership, and for that Fiat would get product help and distribution capability. This lead to years of product success and improvements, and years later the “partial ownership” became a full one.
Second major thing he did was bet big on Jeep. He had the intelligence to notice that the Jeeps retained indelible appeal and were constant and steady in terms of popularity and sales, despite Chrysler’s oscillations and bad performance during the Great Recession. With this observation in hands, he invested on product overhauls and redesigns. This, along with people’s preferences shifted toward SUVs at the time because of gasoline prices, lead to an increase in Jeep’s popularity and a success in Jeep sales.
The third item is a little bit more obvious, and it is the fact that he worked extremely hard. Apart from his exceptional work ethic, he was known for having a lot of energy and working long hours, and he expected the same from his executives. David Cole, director-emeritus of the Center for Automotive Research, described him as “an extra-dynamic individual with endless energy” person. He used to travel a lot from Detroit, Italy and London for all kinds of appointments, because those are the locations where Fiat’s headquarters, old home and legal headquarters are located, respectively. For this reason, his colleagues used to say he was a force of nature, constantly on the move.
The fourth thing is his “bucking convention” way of making decisions, meaning that he acted in an unusual way compared to his competitors. For example, when other companies were investing on subcompact cars and sedans, he soon saw that that was not working for Fiat. But, instead of just decreasing the amount of those type of cars produced or trying to change something in order to increase the amount of sales of those smaller cars, he killed them completely, pulling Fiat Chrysler out of the small-car business. That was a brilliant move, and what he did back then is what other companies such as Ford, Toyota and General Motors had to do later on and are doing nowadays.
Lastly, Marchionne set out a clear vision of the future in an industry where everything is very uncertain. He did it by implementing a policy where the revelation of five-year plans for the company’s growth and short-term future plans was mandatory. Those plans were public and accessible to and by the media, investors and consumers. That was not only a way of holding the company accountable, but also a way to show where Fiat Chrysler was headed.
The way Marchionne saved and improved two car companies at one stake is unique and involved a lot of hard work, creativity and courage. He is certainly an example to be followed and serves as a model for entrepreneurs to look up to nowadays. Sergio Marchionne will forever be remembered and looked up to for his work ethic inside the company and for his extraordinary intelligence and visionary leadership. His brilliant way of acting differently from his competitors in the market and his way of spotting small details and making a significant change out of them are two key factors perceived as very important for leaders and entrepreneurs nowadays to know in other to succeed and stand out from the competition.
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