The sudden departure of Sergio Marchionne from Fiat Chrysler (FCAU.N) will be a dramatic change for the automaker, according to former Chrysler chief executive Tom LaSorda.
“It’s a huge shock for the organization, because Sergio is obviously a legend of his own,” LaSorda, a close friend of Marchionne’s, said in an interview with BNN Bloomberg Monday.
On Saturday Fiat Chrysler replaced Marchionne – best known for his bold 2009 merger of Italian carmaker Fiat and Chrysler – as CEO after announcing the Italian-Canadian’s health had worsened following shoulder surgery last month.
“[Fiat Chrysler Chairman] John Elkann let Sergio run everything. That will be a huge change in the structure of the company,” LaSorda said. “The chairman is still going to be there, and Sergio was the knowledge base of the company.”
Shares in Fiat Chrysler were down 2.28 per cent to US$18.88 at 10:18 a.m. ET Monday on the New York Stock Exchange following the company’s announcement.
The head of Jeep and Ram, Mike Manley, was chosen to replace Marchionne – a move that LaSorda said makes sense for the organization. Manley was a key executive on Marchionne’s team, who not only grew the American Jeep brand, but also oversaw international markets including Asia and South America for most of his career.
“I think the organization will be quite relaxed knowing it’s an insider they know,” LaSorda said. “He’s got great brand and marketing [expertise] and that’s exactly what the company needs.”
LaSorda first met Marchionne in February 2008 at Fiat’s executive cafeteria after the Italian carmaker and Chrysler signed an engine plant deal.
“It was quite amazing,” LaSorda recalled. “I just introduced myself and [Marchionne] says, ‘I know who the heck you are. Let’s get down to talking about business.’
“Almost a year later he actually ended up buying the company without spending any money. So he was always a straight shooter, a tough negotiator.”
LaSorda added that Marchionne’s greatest achievement can be seen by looking just at the market value he’s created at Fiat Chrysler and after spinning off Ferrari from Fiat.
“That combined market value of US$56 billion for [Fiat Chrysler and Ferrari] – this guy has created much more value for shareholders, for employees, to retirement plans, everything else,” LaSorda said. “That in one nutshell is what he’s done for the company.”
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