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Fiat-Chrysler Automobile (FCA) has confirmed that its chief executive, Sergio Marchionne, has stepped down following health complications related to surgery.
British-born Mike Manley, the chief executive of Jeep, has been appointed in Marchionne's stead. According to a statement from Fiat: "The Board of Directors of FCA, meeting today, firstly expressed its closeness to Sergio Marchionne and his family and underlined the extraordinary contribution, both human and professional, that he has made to the company in these years.
"The Board resolved to accelerate the CEO transition process that has been proceeding over the past months and named Mike Manley as CEO. The Board will therefore propose to the next shareholder meeting, to be called in the coming days, that he be elected to the Board and serve as an executive director of the company."
No more details have yet been released as to the state of Mr Marchionne's health, but he is well-known as a heavy smoker, and appeared unwell at a recent event to launch the new Jeep Wrangler.
Whatever his condition, the end of the Marchionne era comes at a crucial time for Fiat. In general terms, the group is in robust financial health, turning profits and about to be debt free for the first time in decades. There are clouds on the horizon, though. Fiat continues to struggle in key European markets, while Alfa Romeo - on which so much of the group's future has been bet - remains unproven at best as a rival to the German Big Three premium brands. Jeep is currently FCA's big success, scoring major sales growth worldwide, but it is over-reliant on a fragile US market and the group as a whole has failed to make inroads into the Chinese market, or on the electric vehicle sphere.
In the past two months, Marchionne finally admitted that he was wrong to have spent so long disparaging the benefits (financial and ecological) of electric power and committed the group to investing more in such tech. Future Fiat 500 models will come with both electric and hybrid power, the Jeep Wrangler Hybrid is about to go on sale, and Alfa Romeo will create a new 8C hybrid supercar - a rival to Honda's NSX - in the next few years.
Mr Manley will have his hands full realising Marchionne's recently-released plans for FCA. It requires Alfa Romeo to become as big a profit centre as Jeep currently is; it will see the Fiat and Chrysler brands scaled back and reduced to a few key models; and it requires Jeep, still a very American-centric brand, to find full global appeal and to compete with the hordes of profitable rival 'soft readers' without losing the allure of its legendary rough terrain prowess.
Marchionne took over Fiat just as it prepared to launch the revived 500 model, and departs just as that car's replacement is moving from the drawing board to production. The 500 and its success did much to save Fiat from the verge of bankruptcy in the mid-2000s. Marchionne underpinned that success by squeezing USD$2 billion out of General Motors to stop Fiat exercising a stock option, and then all-but single-handedly orchestrated the buyout of bankrupt Chrysler from the US government, a move that has brought Fiat its currently financial success. More recently, Marchionne has overseen a partially-successful revival of Alfa Romeo and Maserati, and spun off Ferrari into semi-independent status with a flotation on the New York Stock Exchange.
It had been assumed that Mr Marchionne's retirement from Fiat, due early next year anyway, would see him take up more responsibility at Ferrari. Instead, Louis Carey Camilleri, a 63-year old Egyptian-born businessman who has held senior roles at Philip Morris Tobacco and Kraft Foods, has taken the top job at Ferrari. John Elkann, the nephew of legendary Fiat patriarch Gianni Angelli, who is now head of Exor, the holding company that (effectively) owns both FCA and Ferrari lamented the departure of Mr Marchionne. "I am profoundly saddened to learn of Sergio's state of health. It is a situation that was unthinkable until a few hours ago, and one that leaves us all with a real sense of injustice" said Mr Elkann in a statement.
"What struck me about Sergio from the very beginning, when we met to talk about the possibility of him coming to work for the Group, even more than his management skills and unusual intelligence, were his human qualities, his generosity and the way he understood people. Over the past 14 years together we have lived through successes and difficulties, internal and external crises, but also unique and unrepeatable moments, both personal and professional."
The new 500 will have to be a huge success if the Fiat brand is to survive in its traditional markets. Likewise the second wave of new Alfa Romeo models. Marchionne's combative, often abrasive style may have angered many (employees complained of his round-the-clock emails and phone calls, and being dubbed 'my favourite car company boss' by Donald Trump won't have gone Marchionne's image much good in some quarters) but without him at the helm, Fiat's future just started to look a little more shaky.