Events Calendar
In This Section
Most Read Stories
Man robbed at Tallmadge Avenue eatery
Another winter punch heading toward Ohio
Four teens restrain man, take items from his Akron home
Complaints against officer keep coming
Police: Ohio girl dies after fall into snow bank
Region makes way for latest batch of snow; cancellations rise
Cuyahoga Falls residents come home to find burning couch on balcony
Blogs:
First Bell - On Education:
No City of Akron basketball tonight
Pets:
Pet telethon re-airs
The Heldenfiles:
Chipmunks "Squeakquel" on DVD/BD March 30
Akron Zips:
Late surge gives Zips ugly road win
Tribe Matters:
Blogmail response on Hafner
Cleveland Browns:
Stallworth's contract terminated
Balanced Ledger:
QB in Browns future: another mock draft
Kent State Sports:
KSU Notes – February 9
Cleveland Cavaliers:
NBA Power Rankings from Around the Internet
Buckeye Blogging:
Buckeyes grab 18 players on signing day
Varsity Letters:
Garfield at Buchtel basketball
All Da King's Men:
Palin At The Tea Party Convention
Blog of Mass Destruction:
Republican Pre-Conditions
Akron Law Café:
Law, Love and Chocolate
Car Chase:
Collector Car Hobby Loses One of the Best—Jim Roll
Let's Talk Real Estate:
Decisions Decisions: Credit Cards or Your Mortgage?
Ohio Travels with Betty:
Loucile is looking for a Lake Erie getaway in June for three kids, ages 1, 3, and 5.
Sound Check:
Talk of the Town – Top entertainment picks for the weekend
HRLite House:
OFCCP Report
Akron Gamer:
Makers of 'Castle Crashers' unveil 'BattleBlock Theater'
See Jane Style:
Do IT this week: Layering
Sergio Marchionne unafraid to make changes to save troubled companies
By Colleen Barry
Associated Press
Published on Sunday, May 24, 2009
MILAN, ITALY: Sergio Marchionne's first days as Fiat CEO were marked by fear at the company's headquarters, as some top managers saw their careers abruptly end in a 20-minute chat.
The new chief executive quickly determined whether each manager had the skills to help transform tradition-bound, family-run Fiat — namely ''speed, simplicity and self-confidence.''
''Many did not make the cut,'' Marchionne recalled later.
Marchionne then dismantled Fiat's old hierarchy in favor of what he calls a ''flat management structure'' — fewer managers for quicker decisions. He has already said similar changes also are needed at Chrysler, the limping U.S. automaker that he might soon be running.
Marchionne's bold conquest — a deal for 20 percent of Chrysler, to rise to 35, with not a penny down but in exchange for Fiat technology valued at some $8 billion — was made possible by the financial crisis that has crippled the automotive industry.
Chrysler is just the kind of train wreck the dual Canadian-Italian citizen, with a background as a turnaround expert in Switzerland, has shown he can fix, employing an outsider's detachment and a willingness to shake things up.
''He has one method, one genetic impulse,'' said Klaus Stoehlker, a leading Swiss
management consultant who observed Marchionne's rise from a controller to the head of Swiss industrial concern Alusuisse Lonza Group, then to the helm of goods inspections firm SGS SA and onward to Fiat in the space of 12 years.
In each of those cases, Marchionne walked into situations of weak management and cleaned house, unfettered by local loyalties.
''I don't think it is ruthless, it is very deliberate,'' said Stoehlker. ''His priority is the shareholders. He knows whom to serve. That is what he did at Alusuisse, what he did at SGS and what he is doing in Turin [where Fiat is based].''
His focus on shareholder interest is what got the attention of the dynastic Agnelli family, a major stakeholder in Fiat and SGS, where Marchionne cut jobs and expenses, slimmed management ranks and more than doubled the share value.
Marchionne joined Fiat's board in May 2003, four months after the death of Gianni Agnelli, the patrician industrialist who for decades controlled the company. He became CEO in June 2004, following the death of Gianni Agnelli's brother Umberto, Fiat's chairman.
Marchionne's status as an outsider was an incalculable advantage. He was born in the central Italian town of Chieti but raised from age 14 in Canada. He got his MBA and commerce degrees at the University of Windsor. Marco Ferrante, who published a 1997 book about the Agnelli family, suggests the fact that Marchionne never met Gianni Agnelli, the man all of Italy revered as ''The Lawyer,'' freed him.
''It was the first time that a boss had no memory of the myth, didn't have to confirm himself to his memories,'' Ferrante wrote.
Marchionne brought in outsiders into key positions, including Harald Wester, chief technology officer who hailed from Volkswagen and Ferrari and who has been part of the Chrysler talks.
While Marchionne inherited the Grande Punto and Panda — both small, hot-selling cars — he pushed for the redesign of the iconic 500 and the reintroduction of the Fiat Bravo, a car that proved Fiat could build a midsize sedan people would buy. In an example of flat management at work, Fiat came out with both cars in just 18 months.
He also inked more than 30 limited industrial alliances that have allowed Fiat to share technology and expand into new markets.
Key to funding Fiat's turnaround were two savvy financial moves. One was a $2 billion payment from General Motors to walk away from an option to buy Fiat, which at the time was teetering on the edge of bankruptcy. Another that received less buzz but was just as important was a deal to get suppliers to cut costs by up to 5 percent, said Francesco Zirpoli, an expert in organizational innovation at the University of Salerno.
Marchionne, who speaks both unaccented Italian and English, has won the confidence of the analyst community with clear goals, unmuddled thinking and plain speaking.
He comes off as part business professor and definitely more leader than manager. More comfortable in sweaters than business attire, he quotes economic theorist Adam Smith, Austrian economic and political scientist Joseph Schumpeter's ''creative destruction'' theory and author Lewis Carroll's Red Queen in a single speech.
Lest anyone think he's not really a car guy, Stoehlker recalls him pulling up to Alusuisse offices every day in a Porsche. Marchionne infamously totaled his Ferrari 599 GTP Fiorano on a Swiss highway in November 2007, walking away unharmed.
Marchionne isn't afraid to put in seven-day workweeks and, even before the Chrysler deal was in play, he often flew to the U.S. to work on the turnaround of Fiat's agricultural and construction vehicle business CNH.
Marchionne expects his team to put in similar hours — a tendency that has forced out some able managers, said Giuseppe Volpato, a professor at the Ca' Foscari University of Venice who wrote a book on Fiat.
''If he has a defect, it is one of managing by stress,'' Volpato said. ''Not everyone can sustain these rhythms for two to three years. It is very heavy.''
Adam Jonas, a Morgan Stanley auto analyst, said trying to manage both Fiat and Chrysler has its risks: ''Chrysler needs strong leadership. There are only so many hours in a day.''
Stoehlker says Marchionne's dominant characteristic is one of a survivor who seeks new challenges — something Stoehlker has dubbed the ''Nansen theory,'' for the Norwegian Polar explorer Fridjof Nansen, who survived a 1893 expedition by leaping from ice floe to ice floe.
''Marchionne jumps from iceberg to iceberg and tries to make a win out of it. He has to jump to the iceberg of Chrysler.''
MILAN, ITALY: Sergio Marchionne's first days as Fiat CEO were marked by fear at the company's headquarters, as some top managers saw their careers abruptly end in a 20-minute chat.
Get the full article here.
Comments
Click here to post your comments
Posted 07:35 AM, 05/24/2009
He's gonna splash.
