The brand most closely identified with Italian flair, passion and beauty – Ferrari – is about to be run by a Canadian. Enzo Ferrari, the founder of the sports car maker and racing empire, might be rolling in his grave.
Sergio Marchionne, the Canadian-Italian CEO of both Fiat and Chrysler, is to become chairman of Ferrari next month, when Luca Codero di Montezemolo, the current boss, steps down, Fiat announced Wednesday morning.
For the current generation of Formula 1 racing fans, it is hard to imagine Ferrari under the leadership of anyone but Montezemolo. The Italian aristocrat, industrialist and fashion icon has led Ferrari since 1991 and steered it to stunning success. In the Michael Schumacher years, from 1996 to 2006, Ferrari was virtually unbeatable on the F1 circuit.
But Ferrari's F1 machines have been on a losing streak in recent years, even if its road cars are more popular than ever, and Marchionne, who is famous for speaking his mind, was clearly not pleased. On Saturday, after Ferrari's humiliating defeat at the Italian Grand Prix, Montezemolo publicly stated he wanted to spend another three years in the job. Marchionne apparently had other ideas. He said that a change in Ferrari's leadership was not on the agenda, but added that "no one is indispensable."
Within minutes, the Italian racing press reported that Montezemolo's days were numbered, and they were right. In a statement, Marchionne referred to the blurt that apparently triggered Montezemolo's resignation.
"As Chairman of Ferrari, he drove the company to a new level of technological and organizational excellence which also brought with it outstanding financial results, he said. "Luca and I have discussed the future of Ferrari at length. And our mutual desire to see Ferrari achieve its true potential on the track has led to misunderstandings which became clearly visible over the last weekend."
On Wednesday night Fiat said Montezemolo would receive a combined severance payout of 26.95 million euros ($34.80-million U.S.), plus other benefits.
Montezemolo's resignation marks the end of an era for both Ferrari and Fiat. For decades, he has been an intimate associate of the Agnelli family, Fiat's controlling shareholders, and knew Gianni Agnelli, the family's patriarch, well. Agnelli, who was one of the richest men in Europe and who briefly turned Fiat into Europe's biggest car maker, died in 2003. A year later, Montezemolo became Fiat's chairman, a role he kept until 2010, when Agnelli's grandson John Elkann was appointed to that position.
Under Agnelli, Fiat bought 50 per cent of Ferrari in 1969, when Enzo, the founder, was still running the show. It later raised its stake to 90 per cent.
In Milan trading, Fiat's shares climbed 2.2 per cent after the announcement of Montezemolo's departure. The climb was attributed to investor speculation that Montezmolo's departure could open to the door to an initial public offering of Ferrari, whose sales in the showroom, if not the track, have been strong and rising. Earlier this week, the Italian bank Mediobanca said in a report that "expectations for a Ferrari listing may support the Fiat share price."
Fiat is merging with Chrysler to form Fiat Chrysler Automobiles, which will shift its primary market listing from Milan to the New York Stock Exchange in the next month or two. Some analysts think that Ferrari, which made euros 246-million in profit on sales of euros 2.3-billion last year, is by far the most valuable business in the Fiat-Chrysler group.
With a Canadian in Ferrari's driver's seat, and a New York listing for Fiat, Ferrari's Italian racing blood is getting diluted, which may not be good for the brand. According to a recent story in Corriere della Sera, one of Italy's biggest newspapers, Marchionne has told his friends that "Ferrari is now American."
With a file from Reuters