Sunday, April 15, 2012

His name sounds like it should be the special dish in a fancy Italian restaurant instead he is probably the most successful CEO in America today. The leader of a company used to have a name like say, Clive Davenport and be a graduate of a ivy league school and have an office that took the entire upper floor in a building. Well, Sergio Marchionne isn’t like any other CEO around. For starters, he paid back all the bail out money, yes the Obama General Motors loan in its entirety at 19% interest.
It is encouraging to see new life in the past year to the American auto industry . In many ways the most dramatic recovery has been Chrysler. Three years ago the company was headed for the junkyard but last year made a $180 Million dollar profit and would have made more if they didn’t decide to pay back the loan 6 years ahead of schedule. We all wish we did as well in our personal finance. Much of the credit for the success of the company can be given to the tax payers that gave them the money and to the workers who accepted wage and benefit cuts.
None of the success would have happened without the efforts of the 59 year old Italian born, raised Canadian auto executive named Sergio Marchionne who engineered a last minute partnership with his company Fiat. He looks more like a movie director in black sweaters and relaxed demeanor rather than the starched suit guys that run companies from their penthouse offices. He is on the assembly line most days and already rescued Fiat from financial ruin.
When he arrived in 2009 he remembers the fear in the eyes of the people that just wanted to keep their jobs and work and noticed that there is nothing worse than to be a victim of a process that is outside of your control. He is most proud of the smiles now. The controlled bankruptcy that he negotiated with the Federal government that allowed Fiat to take over the failing American auto maker was the key to his success. It was the last hope for Chrysler and its 54 thousand employees.
There wasn’t a company that wanted to be there for the auto industry. It is like being the only person sitting at a Bar. There has to be a reason why no one is there drinking. Steve Radner who is head of the Presidential Task Force on the auto industry said, “If Sergio had not appeared, it would have been very possible that Chrysler would have had to liquidate.” The demise of this company would have cost 300,000 jobs up and down the industrial job chain.
Being a tough negotiator, in the end Fiat got a 20% stake in a brand new slimed down debt free factory called the Jefferson North Assembly for Chrysler, used the $6 Billion dollar loan to refurbish the factory with state of the art new equipment and upgraded 16 car models in just 18 months. He has also integrated both car companies like as if they were the other half of a coin. Who would imagine Americans embracing an Italian auto maker? Will middle America drive a Fiat? I know corporate America will love to drive the Ferraris!
Chrysler’s best assets were Jeeps, Minivans and light trucks. Fiat’s assets were in small car technology and fuel efficient engines. The combination in technology is going to be seen in the rebirth of the Dodge Dart being built in Belvedere, Illinois to be rolled off the assembly line next month. The new car did not even appear on paper in 2009 and is the first new car for Chrysler in nearly a decade. Hey, we all grew up surrounded by Dodge Darts at one time in our lives! It is a slightly longer and wider version of the Alpha Romeo Juliette.
The Dart is reengineered and built in the USA. It’s base price will be under $16,000 with 40 mpg. The company needs the Dart to be as popular as it once was. Under Sergio’s watch according to Consumer Reports the quality of both Fiat and Jeeps have improved in recent years. He is so confident that he plans to be EXPORTING the American made Dart to more than 60 countries. Now when was the last time your heard of America exporting? It has been awhile!

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