Boss known for swift action ‘made Fiat more successful and a little less Italian’

Sergio Marchionne, the former Fiat Chrysler chief executive who merged and revived the Italian and US carmakers, has died aged 66.

Marchionne, who fell ill with complications from shoulder surgery, was replaced as boss of the manufacturer last weekend as his condition deteriorated.

The company’s chairman, John Elkann, part of the Agnelli family who own Fiat, said in a statement on Wednesday: “Unfortunately, what we feared has come to pass. Sergio Marchionne, man and friend, is gone.”

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Marchionne joined Fiat in 2004 and forged a reputation for swift, tough action, cutting layers of management and overseeing a return to profit and further global expansion. In 2009, Fiat took its first stake in the bankrupt US firm Chrysler, eventually completing a takeover and merger in 2014 that would create the world’s seventh-biggest car manufacturer.

News of his death will compound a sense of uncertainty at Fiat, although investors were primed for the charismatic chief executive’s departure, planned for 2019. After the announcement in June shares fell 10%.

Facebook Twitter Pinterest Sergio Marchionne with the Italian prime minister Matteo Renzi in January 2016 as the carmaker made its Milan stock market debut. Photograph: Daniel Dal Zennaro/EPA

Marchionne had sought further mergers to help his company tackle the cost of developing a new generation of electric and autonomous vehicles, but his attempts to woo General Motors were rebuffed. Marchionne had been due to remain at the helm of FCA-owned Ferrari, now spun off as a separate division, and Ferrari shares have slipped 7% since it was confirmed he was stepping down.

A new chief executive, Mike Manley, who headed Fiat Chrysler’s Jeep division, was installed on Saturday as the firm announced Marchionne would be unable to return to work following his surgery, carried out three weeks ago in Switzerland.

The challenge for Manley began immediately when the head of Fiat Chrysler’s business in Europe, Middle East and Africa resigned after being passed over for the top job.

The firm has seen its market share slip in Europe since 2009 and has put its faith in producing more SUVs, as well as electric and hybrid cars, with a target of doubling profits by 2022. The Jeep brand, which has had strong sales under Manley’s watch, remains one of its stronger hopes.

However, Fiat Chrysler are left now without one of the car industry’s more distinctive figures– a man known for colourful turns of phrase, tough deal-making and his signature dark cashmere sweaters. Marchionne was credited with financial coups in persuading GM to pay $2bn to sever its ties with Fiat, and the US government to hand over its share in Chrysler in exchange for Fiat’s technology.

Marchionne joined Fiat after working in accountancy and biotechnology firms, headhunted as an outsider by the Agnelli family to shake up its family-run enterprise. He returned the loss-making company to profit within two years, partly by speeding up production times and laying off thousands of workers, earning him the long-term hostility of many in Italy, from unions to the populist Five Star movement.

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Carlo Alberto De Casa, an analyst at ActivTrades, said Marchionne deserved credit for turning an “almost bankrupt” Fiat into an international powerhouse.

“His heritage could be described in just a few numbers: in 2004, when Marchionne took over, Fiat’s revenue was close to €47bn, today it exceeds €140bn. The company’s profit almost trebled in the same period.

“Loved or hated, Marchionne is the man who made FCA as we know it today: more successful and a little less Italian.”

Although Marchionne was seen as a tough boss – and quickly sacked a rank of Chrysler executives on assuming control in the US – analysts said he should be considered the man who saved the ailing Detroit firm. Autotrader.com analyst Michelle Krebs said: “It’s highly unlikely that Chrysler would exist today had he not taken that gamble. The company was in such bad shape, being stripped of any kind of resources by the previous owners.”

Trading in Fiat Chrysler was temporarily suspended in Milan on Wednesday after shares fell 4.5%. It came after the firm reported a disappointing operating profit for the second quarter, and revised down parts of its full-year outlook.