* The consummate dealmaker
* Cost-cutter: "I like to fix things"
* Brought Fiat back from the brink
By Gilles Castonguay
MILAN, April 30 When it comes to taking on a
challenge, Sergio Marchionne does not waste any time.
No sooner did the hard-driving chief executive of Fiat SpA
FIA.MI say the Italian car maker needed a partner to survive
the worst industry crisis in decades than he announced talks
with Chrysler LLC [CBS.UL] in January to do just that.
And on Thursday, he made his biggest -- and some say,
riskiest -- move by entering into a partnership with Chrysler
that could leave Fiat the majority owner of the U.S. automaker.
And rather than wait for the deal to close, the
chain-smoking troubleshooter last week raised the possibility
of opening a second series of talks with another car maker. He
declined to say which one, but Opel, the troubled German unit
of General Motors Corp (GM.N), is the likely candidate.
Having become a star for his feat of turning around Fiat
after it had been written off for dead, people do not doubt his
ambitions nor his abilities to take on ever bigger challenges
involving troubled car makers.
Another deal, such as one with Opel, for example, would
create the second-biggest car maker in Europe after Volkswagen
"There are not that many people who have the force of
conviction ... to pull it off (like Marchionne)," UBS Warburg
analyst Philippe Houchois said.
With the car industry in crisis, Marchionne has not only
called for its consolidation but also made Fiat a proponent by
entering talks with Chrysler.
The 56-year-old Italian-Canadian has often spoken of the
need to reduce the number of car makers, arguing that they have
been operating beyond their means, producing more cars than the
market can absorb.
Marchionne has insisted that he harbors no dreams of
empire-building, despite his aim to gain scale for Fiat,
Europe's sixth-largest car maker by unit sales.
"We are trying to drive an argument purely based on
industrial efficiency. That is the only thing I care about," he
told analysts in his typical no-nonsense style on a conference
call last Thursday.
A lawyer and tax accountant by training, Marchionne does
not come across as a corporate Caesar. In contrast to most
Italian executives, he shuns expensive suits and ties in favor
of a blue sweater over an open-necked shirt.
He does allow himself to enjoy some trappings of luxury,
however. After long spells at Fiat's offices in Turin, Italy,
Marchionne gets behind the wheel of a Ferrari when he goes back
to see his wife and two children at their home in Switzerland.
NO STRANGER TO MERGERS
Empires aside, Marchionne is a no stranger to mergers
involving more than two companies.
He was chief executive of Alusuisse Lonza when it joined
Canada's Alcan in 1999 and later added France's Pechiney.
Passed over for the top job at the combined group, he took
over at Lonza Group LONN.VX when it was split from Alcan.
With a tightly focused strategy, he turned the chemicals and
energy group into one of the sector's top performers.
His reputation as someone who produces results had spread
wide enough that news of his move to SGS SGSN.VX sent shares
in the Swiss inspection and certification firm up more than 8
percent and those in Lonza down nearly 2 percent in 2002.
The following two years saw Marchionne turn SGS into one of
the best performers on the blue-chip Swiss Market Index by
slashing management and boosting margins.
Impressed by his achievements, Italy's Agnelli family, an
SGS shareholder, invited him to try his hand as CEO of Fiat in
"I like to fix things and to be blunt, Fiat needs a fix
right now," he told a news conference after his appointment to
the Italian car maker, whose survival was in doubt.
Marchionne's first task was to take Fiat out of a bad
relationship with GM, which included a cross-share ownership
and cooperation on engines and models for the European market.
Aware of GM's desperation to free itself of the obligation
to buy Fiat's car business as dictated by the terms of their
alliance, he got GM to pay $2 billion to end the affair once
and for all.
Marchionne then turned his attention to Fiat.
In place of a structure with an inflexible hierarchy, he
shed entire levels of middle managers and instilled a
He took a knife to costs, drastically reducing the number
of platforms used for cars and the time to bring new models to
Following the industry trend, he formed joint ventures to
share development and production costs with an aim of becoming
as efficient as Toyota Motors (7211.T), which he considered the
Confounding his skeptics, he soon made Fiat profitable
again, leading it to beat not only short-term targets but also
set new records, quarter after quarter.
The successful launch of an updated version of the
Cinquecento (500) city car in 2007 marked its recovery from
The crisis brought this winning streak to a halt, however.
By the first quarter of 2009, Fiat was back burning cash,
juggling a huge debt and running a loss.
(Editing by Patrick Fitzgibbons and Steve Orlofsky)