At Fiat, young scion steers tough course as Marchionne's boss

[nadepalma]

At Fiat, young scion steers tough course as Marchionne's boss
November 10, 2012

TURIN, Italy (Reuters) -- Whenever Sergio Marchionne, CEO of Fiat and Chrysler, appears in public, television crews jostle to beam his words around the globe. Amid the push and shove it's easy to miss the tall, curly-headed young man who often looks on from the sidelines.

He's John Elkann. And he's Marchionne's boss.

The 36-year-old scion of Italy's powerful Agnelli clan became vice chairman of Fiat -- founded and still controlled by his family -- just under a decade ago, and chairman in 2010. For years, his was the saga of a shy, awkward young heir thrust prematurely into corporate leadership by family tragedy. No more.

Now Elkann is taking the key role in answering the question that faces his family's firm: Is what's good for Italy really good for Fiat anymore?

The question evokes the famous statement -- "I thought that what was good for America was good for General Motors and vice versa" - by Charles "Engine Charlie" Wilson, then the president of GM, 60 years ago.

Nobody is calling Elkann "Engine Johnnie." But many thought Fiat had outgrown Italy in 2009 when it snapped up a controlling stake in Chrysler and left Elkann to wrestle with the politically potent question of how closely the family firm, long the symbol of corporate Italy, should remain tied to the troubled economy of its home country.

MORE AT: http://europe.autonews.com/apps/pbcs...rchionnes-boss

[germeezy1]

The direction that they now proceed in is very necessary, and one in which they must execute and embrace. Though Marchionne is immensely talented Fiat has an uphill battle in front of them as they decide how to right the sinking ship in Europe.

[staspeterson]

The extra, other shoe has yet to drop.

Fiat led the other European automakers and was the first to close a plant, Termini in 2011, while others are only considering doing so now.

The attempt to moved mass manufacturing autos out of Italy has largely already been silently accomplished, with small car manufacture in lower wage Poland at Tychy, Serbia at Kragjuvec, and Turkey at Tofas, along with Toluca Mexico and Betim Brazil. Investment in highly modernized Pomigliano where the A-segement Panda is made, has shown that the savings are not enough. But it does provide a foothold in Italy, to be able to say that Fiat is Italian based.

Attempting to move the firm's product's upmarket to cover high manufacturing expenses in Italy may or may not succeed.

But even if it does succeed, there is no way that Fiat will need five Italian factories to manufacture the lower volume but hopefully higher profitability, of upscale cars.

So another plant closing or even two in Italy is inevitable. Sergio Marchionne has deferred that for the worse times that will come in 2013, when many other European automakers wil be closing their first plants. Another closed Italian auto plant or two will get lost amidst the wreckage. Even amidst the collapsing markets in Europe and sales down some 20%, Fiat has managed to actually gain market share, by simply losing less share than others.

Sergio is conserving cash by delaying re-design of the mass market B-segment and C-segment Fiat cars. But you can't do that forever. Perhaps the intent is to share the development with another automaker, like Mazda, or Suzuki or even Fiat Brazil, or maybe all three. Chrysler has produced a fully modern C-segment platform using the Alfa-Romeo Gulietta as a foundation, and is actively working on future D and E- segment architectures that will be adapted in premium form, for Alfa Romeo and Maserati.

Meanwhile America has been fully right-sized, by the Bankruptcy in 2009 during Obama's First Recession. America [Chrysler] is now profitable and the NAFTA plants are all working at profitable near capacity, as are the Brazilian ones. The foundation investments have been made, in platforms and drivetrains, and Sergio can now safely save cash in Chrysler by defering the launch of more modern platforms as Chrysler prepares to ride out the coming Second Obama Recession.

[germeezy1]

I emphatically agree with your post except for the political rants as if you can personalize a recession when the person you attempt to name as responsible is in fact incapable of doing so alone.

[eaton53]

the foundation investments have been made, in platforms and drivetrains, and sergio can now safely save cash in chrysler by defering the launch of more modern platforms wah, wah, wah, wah, wah.

fify