WHEN THE city of Turin held an all-night party for 250,000 people in July 2007, there was an extravagant son et lumière, with a fireworks display on the banks of the River Po. Special events were held in the city’s public squares, bars and restaurants. The occasion was not the hosting of a World Cup or the Olympic Games. Rather, the local car manufacturer was celebrating the launch of the new Fiat 500, and the next day 1,000 journalists from all over the world would take it for a test drive through the city’s streets.
This was the sort of spectacle that used to happen regularly in Fiat’s home town, but for many years the mood in car-manufacturing circles had been depressed; the Agnellis, once the city’s ruling princes, were gone, and workers had been laid off by the thousand. Yet the company was now roaring back with a modern mini-car designed to resemble the tiny 1957 Cinquecento that had put many Italians in four wheels for the first time.
It had been a remarkable turnaround. When Sergio Marchionne was brought in to run Fiat in 2004, he was the company’s fifth chief executive in two years — and had never spent a day working in Italy. He also had no experience of the car industry. Already €10 billion (about £7 billion) in debt, the company was haemorrhaging cash. “I like to fix things and, to be blunt, Fiat needs a fix right now,” said Marchionne, who had a reputation for ruthlessness and a sense of urgency.
He discontinued the Punto, Fiat’s bestselling hatchback, because he was convinced that the investment would not pay off. He also introduced new models of the Fiat 500, which he described as the iPod of cars. Within three years his methods had been vindicated as a succession of brilliant new models rolled off the production line.
At the time of his appointment Fiat was in an unhealthy relationship with the American company General Motors (GM), and both parties needed a fresh start. Among Marchionne’s first achievements was persuading GM to pay $2 billion to end the affair. Almost immediately the company placed advertisements across Italy declaring: “Fiat is all-Italian again.” The Grande Punto would soon be launched and the company’s market share would take an upturn.
Turning to Fiat itself, Marchionne shed swathes of middle management, reduced production lines, cleaned up the company’s accounting policies and halved the time it took to bring models to market by demanding the creation of computer simulations rather than building prototypes. “When I took over, there was a smell of death,” he said. “We spit blood to clean up and restart Fiat.”
The powerful trade unions claimed that he did so by savaging workers’ rights by bringing them in line with the insecure working practices common in the US and the UK. Explaining how he had dismantled the company’s bureaucracy, Marchionne said: “We’ve abandoned the Great Man model of leadership that long characterised Fiat and have created a culture where everyone is expected to lead.” In 2006 the Fiat Group made a profit of €2 billion. The Sunday Times noted: “The Italian business community is unanimous: Marchionne has worked a miracle.”
Watching from across the Atlantic was President Obama, who invited Marchionne to do much the same for bankrupt Chrysler, with the assistance of loans from the US government, which Marchionne prided himself in repaying early. Moaning of the “shyster” rates charged on the loans, he was accused of antisemitism. He apologised. In 2009 Fiat took a stake in Chrysler, while insisting that the time was right for the industry to discuss consolidation.“The economic crisis will bring about irreversible change in the landscape of the car industry,” he said.
By the time ill health forced him to step down this month, the net result of his 14 years at Fiat’s steering wheel had been to boost the company’s share price more than tenfold. The man who famously worked 14 to 16-hour days, seven days a week, each day of the year, once explained how it was done. “This business,” he said, “if you do it at least the way I think it should be done, it’s all-consuming.”
Sergio Marchionne was born in Chieti, 120 miles east of Rome, in 1952. His father, Concezio, was a police officer, his mother, Maria (née Zuccon), was Croatian. Although young Sergio was Italian, his intellectual formation and early career developed in a very different world. He was 14 when his father retired, moving the family to Ontario in Canada. Educated at St Michael’s College School, Toronto, he later said he had “lost six years” trying to rid himself of his Italian accent to please Canadian girls. He read philosophy at the University of Toronto, law at the city’s York University, and took an MBA at the University of Windsor.
His first job, in 1983, was as a tax specialist with Deloitte & Touche in Canada, and he became acquainted with the world of mergers in 1999 when, as chief executive of Alusuisse Lonza, he coupled it with Alcan of Canada. From there he took over the Lonza Group when it was split from Alcan. In due course he became a director at UBS. By the early 2000s he found himself in Geneva as chief executive of SGS, a testing certification and verification services business that was owned by Fiat’s founding Agnelli family. He joined Fiat’s board of directors in May 2003 and 13 months later, days after the death of the Fiat chairman Umberto Agnelli, he moved into the chief executive’s office in succession to Giuseppe Morchio. It was undoubtedly the biggest challenge he had faced.
“Imagine showing up in June 2004 and being the fifth guy trying to resuscitate what appeared to most people to be a cadaver,” he said. At weekends he inspected the toilets.“I changed everything,” he said. “How can you expect the workers to make a quality product and oblige them to live with such degrading facilities?”
In 1987 he had married Orlandina, an Italian-American originally from Scafa. They had two sons, Alessio, who studied economics in Canada, and Jonathan; their privacy has been tightly guarded by the family and company. Both live with their mother in Zug, Switzerland. The marriage did not last and by 2012 he was living with Manuela Battezzato, 47, who works in the Fiat-Chrysler press office.
While he demonstated a tough exterior, Marchionne had a tender side. A reporter who spent almost a summer pursuing him for a feature returned home to find a gift for his daughter with a handwritten letter that read: “I’m sorry to have ruined your holiday by keeping your father busy.”
Unsurprisingly, there were trappings of luxury. On the rare occasions that the workaholic Marchionne could tear himself away from Fiat’s offices in Turin, he would jump in his Ferrari and zoom across the border. “When you’re pissed off, there’s nothing better than going to 300 [kilometres] per hour,” he once said. His Swiss residency was criticised in Italy because he did not pay Italian taxes, despite being the country’s highest-paid manager.
Employees wearied of his round-the-clock approach. “He emails you at all hours and wants an answer within five minutes, even in the middle of the night,” claimed one. Those tarrying he took off the job. Bespectacled and a chainsmoker — he gave up last year — Marchionne’s passions were opera, poker and flowers. He had planned to retire in April 2019, but last weekend the company announced his immediate departure after complications after shoulder surgery at a clinic in Zurich.
In contrast to most Italian executives, he shunned expensive suits in favour of a trademark dark sweater. Known in Italy as “the man of the eternal pullover”, Marchionne always wore black, because then he did not have to waste three seconds every morning choosing his colour combination.
“It’s an allocation of time and resources,” he said. “I like simplicity almost to the point of being monastic.”
Sergio Marchionne, chief executive of Fiat, 2004-18, was born on June 17, 1952. He died, after complications from shoulder surgery, on July 25, 2018, aged 66
This article first appeared in The Times