The death of Sergio Marchionne has left a great void not only for Fiat-Chrysler, a company that he saved from ruin after he assumed the company’s presidency in 2004 but also in the Mexican world of business.
Marchionne was not the typical company president. He didn’t wear the usual corporate jacket and tie, and before his time with Fiat, he had no previous involvement with a sector as peculiar as the automotive industry. Everything he accomplished he did so “because of his strong character”. The “General Without Fear” (as everyone called him) made surprisingly effective strategies that saved the company.
In 2004 Fiat lost two million euros a day and its cost per share was only 1.60 euros. The situation was so bad that General Motors preferred to pay 1.5 billion to finalize a purchase agreement and not acquire the company. This was the disastrous environment Fiat was in when Marchionne took command of the Italian automaker. Marchionne immediately took measures and managed to not only save the company but also helped its income reach 1.25 billion, 4 billion of liquidity in cash, and titles that reach up to 16.4 euros – according to data of the newspaper El País.
Machionne’s strategy was ingenious from the start. His first move was to seperate the company from General Motors and receive the 2 million disbursement from the American company to finalize the agreement signed in 2000. With that capital, Machionne jump-started the company.
Marchionne’s second objective was to combat the threat from banks which wanted to take advantage of the debts and requested the exchange of debt for shares in order to sell to other brands – explains El País.
These actions helped Fiat rebounded out of bankruptcy. With its 7 plants, the company managed to increase their vehicle production by 39% at the end of 2017. Unsatisfied with his work, Marchionne would then acquire Chrysler in 2017 during a time when the US economy was not going well. Nobody thought this move would be a success, but it was and the agreement to form the FCA group (Fiat Chrysler Automobiles) was signed.
One of the most important commercial strategies also implemented by Marchionne was that Fiat stopped making cars for popular classes and instead began developing luxury models – competing with high-end German companies.
With much admiration, we say goodbye to a titan of industry. Marchionne redesigned the way of doing business and how to lead a company. We honor the words of Marchionne himself:
We have to avoid being arrogant. Success is never permanent but you have to earn it day by day.