Chrysler through the years: Past and present
Ask many of those who follow developments at Fiat Chrysler Automobiles about who will get the nod to replace legendary CEO Sergio Marchionne when he leaves after this year, and the same three names bubble to the top.
One leads Jeep, the brand at the front of the company’s global growth plans. One runs its European operations. And the other heads up finances for the global automaker incorporated in the Netherlands and headquartered in London, with its emotional soul split between Italy and the United States.
Those three — Mike Manley, Alfredo Altavilla and Richard Palmer, respectively — have frequently been mentioned in recent months as the most likely potential successors to the man who has led what is perhaps the automotive world’s most dramatic comeback story.
Speculation on the succession at Fiat Chrysler reached an almost fever pitch June 1 as Marchionne and his executives laid out their five-year plan for the company in Balocco, Italy.
Despite a day's worth of presentations and discussions, however, no additional clarity was forthcoming about the upcoming leadership change. Bernstein analyst Max Warburton said the plan met expectations for profit and cash-flow targets, but the context was odd.
"Marchionne refuses to identify or even talk about his successor. We will have to wait until 2019 to meet his replacement. Richard Palmer, the CFO, said the plan 'shows where we are going.' But we don’t know who exactly is going, who will be leading the team and who will be accountable for what goes right and wrong," Warburton wrote following the event.
So speculation continues about exactly who will see the plan to its end.
For John McElroy, industry expert and host of “Autoline," the three men considered the top contenders for the job all have attributes of note.
Manley, a holdover from the pre-Fiat days at Chrysler, joined DaimlerChrysler in 2000 as a director for the United Kingdom, according to his bio. Manley was tapped as president and CEO of Chrysler Group’s Jeep brand in 2009. In 2015, he added head of the Ram brand to his resume.
“Manley has done brilliant things" with Jeep, McElroy said, noting that he also has a good handle on what needs to be done to grow FCA’s business in China because of his previous role leading Asia operations. “Jeep is the powerhouse for growth and products.”
Altavilla, chief operating officer for Europe, Africa and Middle East and head of business development, has been described in numerous media reports as a Marchionne confidante. He has been with Fiat since 1990. He is the son of an Italian car dealer and was known as a “firefighter” for Fiat, apparently because of his ability to address problems. He helped to arrange Fiat's original deal to acquire Chrysler during the global financial crisis.
“He’s got the whole European experience, he’s much more of a businessman than a Mike Manley or a Richard Palmer. ... Altavilla seems to be the more well-rounded of the three,” McElroy said.
Palmer, the chief financial officer and COO of Systems and Castings, has been Marchionne’s “right-hand guy,” filling in the details during analyst calls with Marchionne, but McElroy noted that “he’s a finance guy, end of story.”
Palmer’s time with Fiat dates to 2003 when he joined as CFO of robotics maker Comau. He helped engineer Fiat Chrysler's debt-reduction efforts — the company is expected to be industrial-debt free this year — and he was closely involved in finalizing the acquisition of Chrysler.
Of course, handicapping a race that is largely happening out of view is really a guessing game. After all, Manley, Altavilla and Palmer have at times been joined by others in the CEO speculation game — Reid Bigland, head of U.S. Sales; Pietro Gorlier, head of MOPAR and COO of Components; Harald Wester, chief technical officer; along with others.
“All of these people are qualified for the job, but do they have the 'X' factor? Are they going to hold a captive audience?” said Ivan Drury, senior analyst at Edmunds.
Drury, who was in Italy for the five-year plan release, noted that it would be hard to judge who has the “X" factor based on the planned presentations at the event. Marchionne, a man who can sprinkle an appreciation for musician Bobby McFerrin and philosophy into comments about the resilience of Fiat Chrysler's employees, has that quality in bunches.
And it was on display as Marchionne maneuvered from planned remarks to various question-and-answer sessions with the media and investors. Manley and Palmer both gave presentations but had limited exposure to audience questions.
Drury believes the logical choice at this point is Manley.
“This is the person who has the weight of FCA on their shoulders. ... The profits have come from this part of the company (and) we really don’t see them deviating from that path,” Drury said. “It almost just seems like too natural of a fit. ... You could go with Richard Palmer, but I think that a brand like FCA that has so much emotional appeal, you kind of do want someone who’s got a bit of fire with them.”
There is some debate about how much of a role Marchionne will have in picking his successor, someone who is clearly expected to come from within the company based on comments from company leaders. The board of directors officially makes the decision.
Drury said he believes Marchionne will have a “strong say” in who is next.
“I think they have to take his advice into account because of what he’s done for the company. For them to disregard him would seem out of character,” Drury said.
Tough act to follow
Whoever follows Marchionne will have a mammoth challenge in expanding upon the momentum he created.
“For starters, Marchionne is one of a kind. He is a strong, take-no-prisoners leader. Aside from the personality aspects, Marchionne’s successor takes over at a time when U.S. sales, at least, have (passed) their peak for this unprecedented run and the auto industry is on the verge of massive transformation,” said Michelle Krebs, senior analyst at Autotrader.
Krebs declined to speculate on the next FCA leader, but she offered some thoughts on what makes a great automotive leader.
“When I think about strong leaders, I recall the many plant managers I have met over the years. I’ve always said that the employees for the best plant managers will march into the wall for them. They clearly communicate the mission and the goals, and they inspire the troops to execute the mission and achieve the goals,” Krebs said.
Fiat Chrysler has achieved much despite its challenging beginnings.
“From a financial standpoint, you’ve got to say that Sergio Marchionne has done a fabulous job,” said McElroy. “Fiat was a basket case when they put him in charge of that, and Chrysler was bankrupt.”
Marchionne, a dual Italian-Canadian citizen with an MBA from the University of Windsor and a career mostly in Europe, was picked to lead Fiat in 2004. The company completed its deal for Chrysler in 2014, five years after Chrysler declared bankruptcy and was bailed out by the U.S. government. For 2017, Fiat Chrysler reported a pretax profit of $4.4 billion (3.5 billion euro).
During his closing remarks, Marchionne referenced a published report asking whether he could leave a script before he retires:
“The answer is that there is no script or instructions. Instructions are institutional and temporary. FCA is a culture of leaders and employees that were born out of adversity and who operate without sheet music. That is the only way we know," he said.
Follow Detroit Free Press reporter Eric D. Lawrence on Twitter: @_ericdlawrence.