Super-Marchio puts his foot down at Fiat

Sergio Marchionne wants his little Italian firm up with the auto giants, and fast.

Italians have no trouble identifying with Sergio Marchionne, whom they nickname Super-Marchio, or Turbo-Marchio. But though he is a full-blooded Italian who speaks the language and drives a Ferrari – fast; in 2007 he had a nasty prang – the key fact about the new Mr Fiat is that the crucial years of his education and much of his working life were spent in Canada.

Italians lament that theirs is a country to which no expatriate can return. Meritocracy is such an alien concept, the vice of raccomandazione or nepotism is so pervasive, unreformed bureaucracy weighs so heavily on every enterprise, that deal-cutting, no-nonsense Italians reared abroad don't stand a chance. Either they never get hired, or, if they do find a job, every effort is made to ensure that they quickly conform to the prevailing sluggish ethic. The really ambitious run a mile, back to where they came from.

Sergio Marchionne is the exception. He was brought into a firm run by the most august dynasty in the country – Fiat has been guided for three generations by Agnellis – because it was in terrible trouble. "It was a laughing stock," Marchionne recalled recently in Harvard Business Review. "Whenever you opened a newspaper in Italy, there was another embarrassing story: Fiat had lost more money; its new car had flopped; a strike was on somewhere."

The man who for decades had been identified with the firm, Gianni Agnelli, grandson of the founder, Giovanni, died in 2002. His younger brother and successor, Umberto, was so desperate to save the car firm, Fiat's core business, from collapse that he was willing to look outside the family, the industry, and the country for a saviour. As it happened, the Agnellis had already benefited from Marchionne's growing reputation as a manager with the magic touch. They were shareholders in SGS, the Swiss testing and certification company, and when Marchionne became its chairman in January 2002, the very fact of his arrival caused the share price to jump 13 per cent. Umberto Agnelli was so impressed by his impact on the firm that the next year he appointed him to the Fiat board. A year later, shortly before his own death, Umberto picked Marchionne to be managing director.

Although he looked Italian and spoke Italian, the new boss's intellectual formation and career were worlds away. Uprooted from Italy at age 14 when his family emigrated to Canada, he "lost six years," as he revealed recently, trying to rid himself of his strong Italian accent and make himself pleasing to Canadian girls. By the time he hit higher education, his distinction was clear. A degree from law school in Toronto was followed by a doctorate in philosophy and an MBA. By the time he went out to look for work, he was bristling with qualifications, as a certified accountant, solicitor and barrister. He embarked on a high-flying financial career, and his familiarity with international finance, and his directorship at UBS, have been crucial in enabling him to propose pan-industry solutions to the greatest crisis the motor trade has ever faced.

But it was his deal-making skills, his impatience with old answers and his ability to pull off dramatic improvements in the companies he joined, and at incredible speed, that marked him out. Still, he expected the worst in Italy. "Even more worrying to me [than Fiat's dreadful performance]," he wrote, "was the fact that the company had gone through four chief executives in three years. Imagine showing up in June 2004 and being the fifth guy to try to resuscitate what appeared to most people to be a cadaver.

"And just imagine what top management thought. These poor fellows saw this executive – almost a foreigner, I'd left Italy in 1966 – coming from outside the car industry to be their new leader. They all sat there thinking: 'Here we go again. We're going to have to teach this guy what the business is about, and if he ends up being like the last one, we're screwed.' I could see it written all over their faces. I would have felt exactly the same in their shoes."

A talent like Marchionne's, one whose motto is, "think at the speed of light", and who has the ruthlessness of North American business drilled into him, could only hope to survive in a country as set in its ways as Italy at a moment of dramatic crisis. That was Fiat's reality back in 2004 – and instead of succumbing like the four chief executives before him, he went to war, slashing dead wood from the hierarchy, head-hunting hungry young executives trapped in out of the way corners of the company, cutting the development time of new models from four years to 18 months. The stunning vindication of his approach came within three years: a succession of brilliant new models that seemed to arrive from a totally different firm from the tired, stale place that had been quietly dying for decades. The Italians sang hallelujah.

"We've come a long way," he says. "We've had to make some major changes to the way the company runs. We've abandoned the Great Man model of leadership that long characterised Fiat and have created a culture where everyone is expected to lead. My job as chief executive is not to make decisions about the business but to set objectives and help managers work out how to reach them."

It is Marchionne's paradoxical good fortune that, while Fiat staged a brilliant recovery, crisis has engulfed the entire car industry. Restlessness is at the heart of the Marchionne style, and the crisis has given him the opportunity to turn little, ailing Fiat, practically unknown in the US, into one of the handful of auto giants which, in Marchionne's view, is all that the market will support once the crisis is over. Today Fiat sells 2.15 million cars a year. By taking over Chrysler and merging with Germany's Opel output could be raised to at least 5.5 million, hoisting the firm up beside Toyota and VW as a survivor.

Of the deal with Chrysler, which has President Barack Obama's approval, he says: "They have everything I don't have (including some things I will never need) and I have everything that they don't have and need." Of the possible deal with Opel, which has to overcome the fears of German and Italian unions about factory closures, he says: "We will learn stuff from each other. This is a marriage made in heaven, industrially."

But, characteristically, he is not going to allow his German counterparts too long to think about it. "This will be done in May," he said last week. "An agreement in principle has to be struck in 30 days."

Flocking round: Beyoncé, Madame Tussauds' latest waxwork, looking fierce in the park
travelIn a digital age when we have more access than ever to the stars, why are waxworks still pulling in crowds?
Arts and Entertainment
Arts and Entertainment
Judi Dench appeared at the Hay Festival to perform excerpts from Shakespearean plays
tvJudi Dench and Hugh Bonneville join Benedict Cumberbatch in BBC Shakespeare adaptations
Is this how Mario Balotelli will cruise into Liverpool?
Ronahi Serhat, a PKK fighter, in the Qandil Mountains in Iraqi Kurdistan
ebooksAn evocation of the conflict through the eyes of those who lived through it
Arts and Entertainment
Poet’s corner: Philip Larkin at the venetian window of his home in 1958
booksOr caring, playful man who lived for others? A new book has the answer
Arts and Entertainment
Exhibition at the Centre Pompidou in Metz - 23 May 2012
Matthew McConaughey and his son Levi at the game between the Boston Red Sox and the Houston Astros at Fenway Park on August 17, 2014 in Boston, Massachusetts.
advertisingOscar-winner’s Lincoln deal is latest in a lucrative ad production line
Life and Style
Pick of the bunch: Sudi Pigott puts together roasted tomatoes with peppers, aubergines and Labneh cheese for a tomato-inspired vegetarian main dish
food + drink
Arts and Entertainment
Alfred Molina, left, and John Lithgow in a scene from 'Love Is Strange'
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Junior Quant Analyst - C++, Boost, Data Mining

£25000 - £35000 per annum: Harrington Starr: Junior Quant Analyst - C++, Boost...

Service Desk Analyst- (Desktop Support, Help desk)

£25000 - £35000 per annum: Harrington Starr: Service Desk Analyst- (Desktop Su...

Junior Quant Analyst (Machine Learning, SQL, Brokerage)

£30000 - £50000 per annum: Harrington Starr: Junior Quant Analyst (Machine Lea...

UNIX Application Support Analyst- Support, UNIX, London

£45000 - £55000 per annum: Harrington Starr: UNIX Application Support Analyst-...

Day In a Page

Air strikes? Talk of God? Obama is following the jihadists’ script

Air strikes? Talk of God? Obama is following the jihadists’ script

The President came the nearest he has come yet to rivalling George W Bush’s gormless reaction to 9/11 , says Robert Fisk
Ebola outbreak: Billy Graham’s son declares righteous war on the virus

Billy Graham’s son declares righteous war on Ebola

A Christian charity’s efforts to save missionaries trapped in Africa by the crisis have been justifiably praised. But doubts remain about its evangelical motives
Jeremy Clarkson 'does not see a problem' with his racist language on Top Gear, says BBC

Not even Jeremy Clarkson is bigger than the BBC, says TV boss

Corporation’s head of television confirms ‘Top Gear’ host was warned about racist language
Nick Clegg the movie: Channel 4 to air Coalition drama showing Lib Dem leader's rise

Nick Clegg the movie

Channel 4 to air Coalition drama showing Lib Dem leader's rise
Philip Larkin: Misogynist, racist, miserable? Or caring, playful man who lived for others?

Philip Larkin: What will survive of him?

Larkin's reputation has taken a knocking. But a new book by James Booth argues that the poet was affectionate, witty, entertaining and kind, as hitherto unseen letters, sketches and 'selfies' reveal
Madame Tussauds has shown off its Beyoncé waxwork in Regent's Park - but why is the tourist attraction still pulling in the crowds?

Waxing lyrical

Madame Tussauds has shown off its Beyoncé waxwork in Regent's Park - but why is the tourist attraction still pulling in the crowds?
Texas forensic astronomer finally pinpoints the exact birth of impressionism

Revealed (to the minute)

The precise time when impressionism was born
From slow-roasted to sugar-cured: how to make the most of the British tomato season

Make the most of British tomatoes

The British crop is at its tastiest and most abundant. Sudi Pigott shares her favourite recipes
10 best men's skincare products

Face it: 10 best men's skincare products

Oscar Quine cleanses, tones and moisturises to find skin-savers blokes will be proud to display on the bathroom shelf
Malky Mackay allegations: Malky Mackay, Iain Moody and another grim day for English football

Mackay, Moody and another grim day for English football

The latest shocking claims do nothing to dispel the image that some in the game on these shores exist in a time warp, laments Sam Wallace
La Liga analysis: Will Barcelona's hopes go out of the window?

Will Barcelona's hopes go out of the window?

Pete Jenson starts his preview of the Spanish season, which begins on Saturday, by explaining how Fifa’s transfer ban will affect the Catalans
Middle East crisis: We know all too much about the cruelty of Isis – but all too little about who they are

We know all too much about the cruelty of Isis – but all too little about who they are

Now Obama has seen the next US reporter to be threatened with beheading, will he blink, asks Robert Fisk
Neanderthals lived alongside humans for centuries, latest study shows

Final resting place of our Neanderthal neighbours revealed

Bones dated to 40,000 years ago show species may have died out in Belgium species co-existed
Scottish independence: The new Scots who hold fate of the UK in their hands

The new Scots who hold fate of the UK in their hands

Scotland’s immigrants are as passionate about the future of their adopted nation as anyone else
Britain's ugliest buildings: Which monstrosities should be nominated for the Dead Prize?

Blight club: Britain's ugliest buildings

Following the architect Cameron Sinclair's introduction of the Dead Prize, an award for ugly buildings, John Rentoul reflects on some of the biggest blots on the UK landscape