[YesAuto News] On July 25, the bad news came: Fiat Chrysler Automobiles (FCA) CEO Sergio Marchionne passed away! This is sad news. Although Marchionne was announced by the owner just four days ago that he could no longer continue to work because of his right shoulder surgery and rehabilitation problems, although we are still lamenting that when a person can be “old and old” is not so great, Marchionne is a legend in the automotive industry. The character just left-the era of Marcione was completely over.
At this moment of grief, no amount of words seemed so pale and powerless. The conclusive words may spread in the industry in the near future. But in Japan there is a judging mechanism: how much a manager’s contribution to the company can be weighed out after three years. When Marchionne has just passed away, how do we make a comprehensive and proper evaluation of this professional manager who has been with Fiat for 14 years (Ma was appointed as the CEO of the Fiat Group in 2004)? Before doing the performance evaluation, share a little detail of Marchionne's life: Marchionne is a 50-year-old, often in sweaters, jackets, and almost never wear a tie. However, at the investor conference on June 1 this year, Marchionne unzipped his jacket and revealed a tie! Then he said: “I can wear a tie very well, too.” It is reported that 14 years ago, Marchionne had promised to make the company achieve net cash flow growth. Once he achieved this goal, he would wear a tie. This is the epitome of this character with dual nationality from Italy and Canada and a professional background as an accountant. Can bohemian but polite? Can you show off without cutting the edges? Can you put it into action even if you speak arrogant words? In addition, it is said that his voice is more magnetic and his smile is also very attractive.
The details of dressing can reflect a person's character, but when talking about Marchionne in the auto industry, we should still speak with facts. FCA investors are still a little dissatisfied with him. When Marchionne announced the next five-year plan in June this year, FCA's stock price plummeted by 7.2%, which explains the problem. However, I think: The Agnelli family should be very grateful to this professional manager who was able to clear all FCA debts before leaving office, achieve net growth in group cash flow, and operate the company’s finances from 2 billion to nearly 80 billion-Mar Cione.
In the early years of his career in Canada, Marchionne was an accountant and tax commissioner. An executive from an accountant background must be able to make the company's book numbers look good. He must also be a well-known capital operator, and perhaps a very profitable one. Master. Throughout the development process of FCA over the past 14 years, Marchionne's unique management mark has been left.
Betting on Jeep
As early as 2004, the Agnelli family found Marchionne when the Fiat business was in trouble, until 2009, Fiat's financial situation was very poor, and debt was always more than cash. In 2009, Marchionne led the merger of Fiat and Chrysler, when Marchionne fancy Chrysler's Jeep and Ram brands. This has also made the FCA Group today, with brands such as Jeep, Alfa Romeo, Dodge, and Maserati. With Chrysler, Marchionne once wanted to bring the Italian brand Fiat back to the American market. Facts have proved that European-style small cars can hardly spread the market in the American market that admires big cars without changing the products. , Undoubtedly, this is a bad decision. Later, Marchionne abandoned small and medium-sized cars in the United States and focused on consumer preference Jeep and Ram. The group’s profitability also relied on these two brands, avoiding the rivalry between Toyota and Volkswagen in mainstream models. Fight, this is Marchionne's strategy.
It is reported that the Jeep brand contributes 70% of the group's profit income. Last year's sales reached 1.4 million vehicles, and the sales target for this year is 2 million vehicles. Marchionne hopes to double the sales of the Jeep brand (approximately 3.5 million vehicles) in 2022, which heralds the need to expand its market share in Asia, South America and Europe. Marchionne has a “scaling theory”, which believes that only sales of more than 5 million vehicles can be profitable, and Marchionne's positioning for Jeep is to occupy 1/5 of the SUV market, basically with annual sales of 5 million vehicles. Marchionne's market forecast is too bold! After all, from a global perspective, Jeep's sales are declining.
Separating Ferrari from the FCA was also a bold decision and accountant-like behavior by Marchionne. In order to repay the debt of 10.9 billion US dollars, Marchionne led the listing of Ferrari in 2016, accompanied by 194 million issued shares, of which nearly 189 million were outstanding shares. Ferrari shares sold 10% at the time of the initial public offering (IPO), raising $1 billion in funding for the company. With the listing of Ferrari, Fick's stock has also risen and its valuation has increased. Such operations belong exclusively to Marchionne. Ferrari sold 8,014 vehicles in the year when it was independent, with revenues of 3.1 billion euros.
Today, Maserati has contributed a lot to FCA's overall performance in terms of sales volume, revenue, or EBIT and profit margins. Although Marchionne has said that FCA's brands may be split, will Maserati follow the Ferrari route? The question was passed to the successor.
“Write a big enough check, FCA is yours.” This is what Marchionne once said. Marchionne is skilled in acquisitions, mergers, and asset sales. The merger between Fiat and Chrysler is the most successful case. However, when an industry appraiser made an estimate for FCA and its Jeep brand, many Chinese automakers were ready to move, especially Great Wall Motors, which focuses on SUVs, announced its intention to acquire Jeep, although it was later rejected by FCA. , But what kind of big scheme is hidden behind Marchionne?
In addition, GM and Volkswagen were reported to merge with FCA, but they all ended in failure. The reason why Marchionne mentions mergers at every turn is consistent with one of his values. He believes that there will only be 2 to 3 car brands in the world in the future. There are also industry analysts who believe that Marchionne talked about the merger more than once in order to appropriately increase its brand value. But what Marchionne really wants to sell is only its weak and small brands, not the main brands, so many The merger or sale of the company has all fallen through. However, from the current point of view, FCA's financial situation has reached a healthy level, and it is not so urgent to talk about sales or mergers and acquisitions.
Although there are so many detours, controversies, and untouchable goal setting, Marchionne made FCA perform well on the books. After all, he was an accountant and knew how to make a company show on the books. The best number (since 2015, FCA has not experienced a quarterly loss). It is precisely because he is an accountant that he uttered such extreme language as “electric cars are not the savior”. Behind the matter is actually the current FCA situation, no more funds are invested in the research and development of electric vehicles. Every decision of an executive is bound to be influenced by his professional background. It is precisely because of Marchionne's vagueness of the electrification plan that he is not optimistic about the number of investors.
However, in the face of Volkswagen, Daimler, BMW, GM, Ford and other car companies have announced electrification strategies, Marchionne seems to be unable to stand up. At this year's investor conference, the electrification and automation plan was finally put forward. It plans to invest 9 billion euros to promote electrification and accelerate the deployment of autonomous driving.
Marchionne left too much work for his successor. I can’t help but sigh: Ma, you shouldn’t leave in such a hurry, so that FCA’s brand positioning will be clearer, and the future operation of each brand will be clearer. In the next five years The implementation of the annual plan will be more orderly.
In 2009, one out of every 23 SUVs sold in the world came from the Jeep brand. In 2018, this ratio is expected to be 1/17. By 2022, the plan is to achieve 1/12. In the future, Jeep aims to account for 20% of the global SUV market. How to achieve? After all, its current sales are declining, which is a goal that Marchionne failed to implement during his tenure. It is reported that in the next five years, the Jeep brand will be consolidated in three new segments: small SUVs, medium pickup trucks and large SUVs. In the field of new energy, by 2021, all models of the Jeep brand will adopt electric versions. By 2022, the brand will provide 10 plug-in hybrid models and 4 pure electric models.
In addition, the Fiat brand has also encountered some embarrassment. Fiat is facing thorny issues such as delisting in China, disappearing in the United States, and declining sales in the Italian market, which are closely related to product layout and low product strength. Perhaps, in order to look good on the books, Marchionne, who is an accountant, is not prepared to allocate more funds to these projects. This is a personal management feature and an act of being responsible to the boss. But how to deal with the future development of the Fiat brand? This is also an assignment. How does Alfa Romeo come back? In the five-year plan, it is proposed that FCA will focus on the four core brands of Jeep, Ram, Alfa Romeo and Maserati, and increase its profitability to 80% of total revenue. In addition, how to implement the current electrification process?
Marchionne could not implement this five-year plan.
The future is left to future people
Because of Jeep's globalization strategy, the Chinese market that was not optimistic about Marcione and ridiculed the use of off-road vehicles into urban SUVs began to gain attention; Marcione, who believed that electric vehicles were not the savior, was the biggest source of pollution, was also in the end. During his tenure, he proposed electrification and automation plans; Marchionne, who often wears sweaters and ties, and Marchionne, who is an accountant, left the future of FCA to the future man-Mike Manley, the former president of the Jeep brand.
The same problem is also left to the Agnelli family. How did the Agnelli family keep the FCA's upward vitality after the departure of Marchionne? You must know that the EXOR group controlled by the Agnelli family is the largest shareholder of the Italian Juventus Football Club, and Ronaldo has joined Juventus this summer, with a transfer fee of more than 100 million euros and an annual salary of up to 30 million euros. Many people are also worried about the financial pressure of Juventus while welcoming Ronaldo. There is no suspense, this financial pressure may be passed on to the FCA Group, and its most profitable Ferrari brand is likely to become the largest sponsor. From this point of view, Ronaldo may become a business card of FCA in the future. Can the Agnelli family slant forward? Have to wait and see.
Marchionne is a qualified professional manager, and the last thing left to FCA is that as of the end of June this year, the net cash flow in a full fiscal year is positive. As a CEO with an accountant background, this is enough. Life is limited. Who doesn't spend his life in groping? And who is not learning and using everything that happens around you? Live until you grow old and learn until you die.