FIAT Chooses Italian-Canadian CEO

Sergio Marchionne replaces Giuseppe Morchio as one of Europe's top heads of industry

FIAT CEO Giuseppe Morchio will be replaced by Italian-Canadian Sergio Marchionne, member of FIAT's board of directors and CEO of SGS, the Swiss leading company in certification.
The choice was made official at the first meeting of the board chaired by Luca Cordero di Montezemolo. The name was a surprise, as it had not been included in the group of potential appointees circulating in the past days (Bernabé, Profumo, Guerra, Demel). This choice has fallen on a man well known to Gianluigi Gabetti, the 80-years-old trusted advisor of the Agnelli family who has now become the chairman of the control company of the whole group.
Since February 2002, 52-year-old Marchionne has been the CEO of Societé Generale de Surveillance, the quality certification colossus floating on the Swiss stock exchange, which is a star in the constellation of companies under Gabetti's control. Gabetti was therefore able to assess Marchionne's professional profile in regards to both industry and finance. Apparently, Marchionne prevailed over another manager well known to Gabetti, Mario Garraffo, at the helm of the Italian operation of General Electric Capital, and formerly head of the Agnelli financial arm in New York. The wound inflicted by Giuseppe Morchio's sudden and unforeseen resignation has therefore been promptly healed, with a solution that was welcomed by the major banks which FIAT is indebted to.
"I talked to the president of Banco San Paolo, Enrico Salza," said Turin mayor Sergio Chiamparino. "Although he did not name names, he told me that the group was oriented towards a high-profile choice."
The CEO from Toronto will have a hard task, but one made easier by the work done over the last two years by the Barberis-Boschetti duo first, and Morchio thereafter.


Umberto Agnelli Passes Away
Like his son, Giovanni's brother succumbs to cancer

Umberto Agnelli's condition worsened in the final couple of days. The cancer that he had been battling was simply unstoppable, and so FIAT Chairman, known as "the Doctor", passed away last Thursday evening.
His death caught many by surprise. In January 2003 his brother Giovanni had died, while FIAT was in the midst of a deep crisis. Many people had sighed in relief when Umberto announced his commitment to the restoration of the company, and welcomed his skill in choosing good collaborators, his leadership on the tangled family tree, and his stubborn entrepreneurial will.
The first symptoms of his illness appeared at the beginning of this year when Umberto complained of back pain and had trouble breathing. He received a bad diagnosis, but kept fighting his cancer to the last moment. He managed to keep his illness hidden until the end of April. On April 26 he attended the presentation of a Veterinary honoris causa degree to his wife Allegra Caracciolo, held in the Great Hall of the University of Turin.
Those who saw him there realized that he was in poor health: he had lost weight and spoke with difficulty.
The rumours were confirmed three days before the stockholders' meeting of May 11. The press mentioned, quoting sources close to the family, "a lymphoma, believed curable". Gianluigi Gabetti voiced hope, saying, "we fully trust the treatments being administered."
Such hope was illusory, however. On May 11 Umberto Agnelli had another crisis and couldn't attend the board meeting and the subsequent stockholders' meeting. Treatments continued, with mixed results. The situation worsened considerably between Wednesday and Thursday, rapidly reaching the unavoidable end. In the beautiful villa surrounded by the trees of a large park, close to Turin, Allegra and their children Andrea and Anna have to live through another family tragedy, seven years after the premature death of young Giovanni Alberto, also killed by cancer. The following day the long series of visitations began, beginning with Franzo Grande Stevens, a lawyer and old friend of the family, and Pierferdinando Casini, President of the Chamber of Deputies.
Turin paid its tribute to the deceased in a room prepared in the historic headquarters of FIAT. Then the coffin was brought to Villar Perosa, the hometown of the Agnellis, for a strictly private funeral. Umberto was buried beside his son Giovanni Alberto. Turin mayor Sergio Chiamparino proclaimed a city-wide day of mourning.


Montezemolo Will Chair FIAT
Chairman of Industrialists' Association replaces Agnelli

Plenty of news in the Agnelli empire: Luca Cordero di Montezemolo becomes President of FIAT, Giuseppe Morchio resigns from CEO, a new generation is brought to the board, John Elkann is appointed to two key posts (Vice President of FIAT and of the family holding) and Andrea replaces his father Umberto in the Board of Directors. The Agnelli family closes ranks after the second death in 16 months, and satisfies its creditor banks by choosing as President the chairman of the Industrialists' Association, a FIAT man to boot. However, the choice of Montezemolo opens an unforeseen rift in the Board with the chairman chosen 15 months ago by Umberto Agnelli, the designer of a plan that was leading the group out of its crisis. "Morchio wanted the presidency for himself," said a source close to the family, "but the statutes of FIAT do not allow it, and the banks did not agree." The meeting of the board lasted a little over an hour, then a five-line press release announced, "FIAT SpA acknowledges the decision of Giuseppe Morchio to resign from the post of Chief Executive Officer. The Board of Directors has been convened for June 1, 2004, for the necessary deliberations."
No thanks. Less than one hour later, the former CEO released another communiqué, giving his version. Morchio's decision, he wrote, "derives from the new conditions arising from today's decisions taken by the board." His resignation, he added, "was tendered with regret, for not being part of the plan [he] prepared and which [he] always believed in." His decision was rather unexpected, even among the banking community. Many people were astonished at the sudden departure of an expert and skilled manager, who abandoned a group employing 160,000 people at a crucially delicate moment.


FROM ST.CLAIR TO TURIN

He came to grow up in Toronto at 14 years of age. Here he went to school, getting no fewer than 4 degrees; here he began working as an accountant; here he got married; here his two children were born; here his mother is still living.
The story of 52-year-old Sergio Marchionne is exceptional, unbelievable, almost a fairytale. Many Italians succeeded in Canada, reaching top positions in this country's socio-ecomic structure. Nobody before Marchionne, however, had ever managed to climb as high as CEO of FIAT, one of Italy's top industries.
As the Gospel says, "no prophet is accepted in his own country."
This, for Marchionne, is both true and false. The new FIAT boss has at least three if not four 'own countries': Italy, where he was born; Canada, where he grew up; Switzerland, where he launched in the world of high finance; and finally, Italy again.
Marchionne is the son of the late Maresciallo Concezio, whom the Toronto section of the Carabinieri Association is named after. He's the brother of Luciana, professor of Italian at the University of Toronto, author of books and essays, who passed away at a young age in 1982.
Maresciallo (Ret.) Marchionne brought his family to Toronto in 1966. He brought with him his wife Maria, born in Pola; and his daughter Luciana and son Sergio, both born in Chieti. The Marchionne family settled down in the Oakwood-Rogers area, close to Anna Sablone, sister of Maria. In that neighbourhood Sergio, who was attending St. Michael's High School, learned to drive his first car, a white FIAT convertible (a portent of things to come?). His first part-time job was with the trust company opened on St. Clair, beside the Ranch, by current Senator Consiglio Di Nino and the late Aldo Principe. A few years later, Marchionne was hired for another part-time job by Tom Stenta, at the time Toronto's biggest importer of ceramics.
Marchionne's prestigious résumé sports a degree in Philosophy; then another in Law, obtained at Osgoode Hall Law School in Toronto. He also got an MBA at the University of Windsor and became a Chartered Accountant in 1985, as well as a Barrister and Solicitor in Ontario in 1987. In Canada he had his early professional experience, from 1983 to 1985 as an accountant and tax expert for Deloitte & Touche.
From 1985 to 1988 Marchionne was group comptroller and then director for business development at Toronto's Lawson Mardon Group; between 1989 and 1990, executive vice president of Glenex Industries. After that, until 1992 he was vice president for finance and chief financial officer at Acklands Limited.
Still in Toronto, from 1992 to 1994 he was appointed as vice president for legal and business development, chief financial officer, and secretary at Lawson Group, which was purchased by Alusuisse Lonza in 1994. That was the same Algroup from Zurich, Switzerland, where he worked from 1994 to 2000, successively becoming executive vice president for business development, chief financial officer, and then chief executive officer. After that he led Lonza Group Ltd, which had separated from Alusuisse Lonza, as its CEO - from 2000 to 2002 - and then chairman of the board.
- Nicola Sparano

Publication Date: 2004-06-06
Story Location: http://tandemnews.com/viewstory.php?storyid=4042