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Fiat limits its losses after visionary boss departs

AFP / Share:
A Fiat car on display at the North American International Auto Show in Detroit, Michigan. Reuters

ROME (AFP) – Fiat Chrysler avoided heavy losses on the Milan stock exchange yesterday after its boss of 14 years Sergio Marchionne stepped down at the weekend due to serious health issues believed to be life-threatening.

As trading got under way, sister companies Fiat Chrysler Automobiles (FCA), Ferrari and CNH Industrial saw their shares fall over 4 percent each.

The three groups are controlled by the Agnelli family.

By 1 pm (1100 GMT), FCA’s stock had edged upwards to a 3 percent loss. Ferrari was down 4.4 percent while CNH Industrial lost 2.1 percent.

The losses came after Mr Marchionne stepped down Saturday after 14 years at the helm of Fiat.

The 66-year-old is gravely ill in hospital in Zurich after suffering serious complications following surgery on his right shoulder last month.

In a statement the Fiat Chrysler group said Mr Marchionne “will not come back to work,” while the Italian media described his condition as “irreversible” yesterday.

The Italian-Canadian executive had taken the reins at Fiat in 2004.

He revamped Fiat, Italy’s premier private enterprise, from top to bottom.

In 2009, he merged Fiat with US automaker Chrysler, then hived off its industrial vehicles in 2011 to create CNH Industrial and successfully spun off the luxury brand Ferrari in January 2016.

John Elkann, FCA chairman who will also take over as chairman of racing car brand Ferrari, said that Mr Marchionne “has been the best CEO that anyone could ask for and, to me personally, a true mentor, partner and close friend.

“He taught us to have the courage to challenge the status quo, to break with convention and go beyond the tried and tested. He has always pushed everybody to learn, to grow and to excel – often beyond their own limits – starting always with himself,” Mr Elkann said.

Mr Marchionne will be replaced as FCA boss by Briton Mike Manley, head of the iconic Jeep brand.

The new head of the luxury carmaker Ferrari will be Louis Carey Camilleri, CEO of tobacco giant Philip Morris. The cigarette-maker has sponsored Ferrari for four decades.

Suzanne Heywood will take over as the new boss of CNH Industrial, which specialises in agricultural and construction equipment, trucks and buses.

Mr Marchionne had already been planning to step down next year.

But experts have cast doubt on the ability of Mr Marchionne’s successors to maintain the momentum he had built up over the years.

German auto expert Ferdinand Dudenhoeffer described Fiat Chrysler as “a weak company and now with Mr Marchionne’s departure, it has become even weaker.”

His successor at the helm of the sprawling FCA, Mr Manley, “is no Marchionne,” Mr Dudenhoeffer said.

Mr Manley “is a car guy, and to manage Fiat Chrysler you need more than just a car guy,” he said.

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