Reuters
Credit: Reuters/Alessandro Bianchi
GENEVA, Switzerland |
Fiat SpA and Chrysler LLC Chief Executive Officer Sergio Marchionne (L) looks back as he attends a meeting with Italy's Prime Minister Silvio Berlusconi (R) at the Chigi palace in Rome February 12, 2011.
GENEVA, Switzerland (Reuters) - The doors of the Geneva Motor Show have just slid open and immediately throngs of reporters and camera crews scramble to reach Fiat's stand. The Italian carmaker is unveiling the Freemont, one of its first models to borrow from the Chrysler playbook since it took a stake in the Detroit auto giant after its 2009 bankruptcy.
But the media isn't here for the car. They want Sergio.
Sergio Marchionne, who runs both Fiat and Chrysler, has a rock star appeal you don't see anywhere else in the global car industry these days. After two hours, he finally appears, tieless, in a dark turtleneck sweater over a white-and-blue checked shirt. As always, he's wearing laceless shoes. Laces take too much time.
"Don't look at me," the Italian-Canadian drawls. "Look at the cars and how beautiful they are." Before taking questions, he keeps everyone waiting until the last Fiat brand presentation is over.
"Why is it like that?" asks one of his helpers, after the scrum has cleared. "This doesn't happen with other car CEOs."
Maybe it's because so much is riding on Marchionne. The car boss is trying to bring together two firms that have struggled in their respective markets for the past decade or so. This year he has to refinance billions of dollars of Chrysler debt and take the company public, with an initial public offering expected in the second half of the year. The plan also calls for Fiat to bump up its stake in Chrysler to 51 percent, and get the freshly combined group melded and motivated to lift its vehicle sales by more than 80 percent by 2014.
"This seems a Herculean task, even for a gifted manager such as Sergio Marchionne," says Thierry Huon, who heads the automotive team of Exane BNP Paribas.
It's also a huge gamble. In what's sure to be a landmark in the IPO calendar, watched by trade unions and politicians from Washington to Rome, Marchionne must sell the story of Chrysler and its partnership with Fiat as one of growth -- despite a fragile economic backdrop, scant presence in the world's largest auto market, China, and a truck-heavy vehicle lineup that's ill-suited for surging oil prices.
Investment bankers are licking their lips.
"He's like the Elvis Presley of the industry right now," said one U.S. banker who knows Marchionne well. "Not only because Fiat had been doing better and he's getting a lot of accolades for turning Fiat around. But it looks like he cut himself a great deal on Chrysler so he's looking like the smart guy in the room right now."
He charms the media. He barely sleeps. He's almost always in a slouchy black sweater, rain or shine, though he will occasionally don a tie if he happens to have a meeting in the Vatican or at the Italian Parliament.
If he does revitalize Chrysler, he will be doing something that eluded its two previous owners: Daimler AG, one of the world's most respected auto makers, and Cerberus Capital Management, a deep-pocketed Wall Street private equity group.
THE BOSS
The son of an Italian "carabiniere" -- a member of the Italian paramilitary police -- Marchionne was born and raised in the impoverished central region of Abruzzi. His family moved to Toronto when he was 14 to escape what his father viewed as the confines of an Italian society obsessed with status over talent. The future finance-wizard started off by studying philosophy in Toronto, but quickly moved to law and accounting.
His background is in finance, not autos, but Marchionne earned kudos for his turnaround skills in 2004/5 when he saved Fiat, Italy's biggest industrial group with a century of history and a 200,000-strong global workforce, from near bankruptcy. The firm escaped a forced marriage with General Motors with $2 billion cash. He took the top job at Chrysler in 2009, hoping to follow in the footsteps of Italian-American businessman Lee Iacocca, the architect of Chrysler's revival in the 1980s. Iacocca had made his name with the pitch: "If you know a better car, buy it."
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