The Fiat hall at the mammoth Frankfurt Auto Show has always been the top destination for the scruffy car journalists who swarm to the event like locusts every two years. It’s not just the glam Fiat group cars—Ferrari, Maserati, Alfa Romeo—that attract them; it’s the girls.
The women who adorn the displays have historically been the show’s sexiest creatures, with ultra-short dresses, knee-high boots and provocative, runway-trained pouts.
While the Fiat girls at this year’s event were as lovely as ever, there was another reason the Fiat hall was standing-room only: The company’s elusive Italian-Canadian CEO, Sergio Marchionne, was due to make an appearance.
No other auto executive has gone from relative obscurity to international stardom as quickly as Marchionne. A year ago, he was the boss of Europe’s sixth-largest carmaker—a relative non-entity. Today he is the man who is shaking up the global auto industry almost single-handedly.
In the depths of the worst auto recession since the Second World War, most car companies went into survival mode—but Marchionne went on the offensive. Fiat took control of Chrysler and attempted the same bold manoeuvre with Opel, the European arm of General Motors. About the same time, he told the French carmakers, Peugeot-Citroën and Renault, that Fiat would happily form a partnership with either of them. They didn’t bite. In time, others might—if the new Fiat-Chrysler partnership proves a winner. Marchionne predicts that only six large auto groups will survive globally, and he fully expects Fiat-Chrysler to be among them. Only last summer, Chrysler was in the Chapter 11 bankruptcy lockbox, and Fiat, while profitable, was considered too small to thrive on its own.
On the auto show’s second media day, Marchionne slumps into the sauna-like Fiat hall in his trademark black sweater and dark trousers. (The last time he wore a suit and tie was when he met the Pope in 2007, when, ever the ragamuffin, Marchionne was photographed in a double-breasted suit left unbuttoned, a fashion no-no.) He’s immediately swarmed by a pack of sweaty journalists (myself included) who shove recorders in his haggard face and give him not a millimetre of breathing room.
Chrysler, he announces, is a big mess. “There’s a whole pile of stuff that we didn’t see when we came in, that we were not expecting,” he says, noting that the company’s previous owner, Cerberus Capital Management, had left the product pipeline practically empty in its two years of inglorious stewardship.
Still, he sounds optimistic about Chrysler’s turnaround potential and predicts that, together, the American-Italian duo will boost annual production to 5.5 million to six million autos, the minimum number required, he believes, to assure the long-term prosperity of any mass-market car company. The trouble is, Fiat and Chrysler as a team are two million cars short of Marchionne’s magic figure. “Between us and Chrysler, we’ll get there,” he reassures the journalistic throng.
Give the man full marks for optimism where others see only gloom. Opinions vary radically about his chances of reviving Chrysler, the most debased of Detroit’s Big Three automakers.
Marchionne may have worked wonders at Fiat, a model turnaround story not matched elsewhere in the industry. But Chrysler is in far worse shape than Fiat was when Marchionne was handed the CEO title in 2004. Chrysler is a repair job from the axles up. Its market share in passenger cars has withered, and its aging fleet of SUVs and minivans, if not its pickup trucks, is outclassed by most Japanese and European, even Korean, competitors. The company that was launched by Walter P. Chrysler in 1925 and went on to invent the minivan and inherit the Jeep brand is a wreck, a textbook case of bad timing, bad management, bad products.
Some analysts doubt that Marchionne can keep Chrysler alive until late 2011, when the company is to roll out the first of a series of Fiat-inspired small cars in the United States, Mexico and Canada. But even the doubters admire the man for attempting mission improbable. “He has balls the size of grapefruit,” says one auto industry analyst.
