Marchionne will remain Fiat-Chrysler CEO until at least 2017
Fiat Chairman John Elkann with CEO Sergio Marchionne in a 2012 Detroit auto show photo.
Photo credit: Bloomberg
DETROIT -- Sergio Marchionne will remain CEO of Fiat-Chrysler until at least 2017 to oversee the full merger of the two automakers and a new strategy to turn around Fiat's money-losing operations in Europe.
"In early May Fiat-Chrysler will unveil a new three-year business plan and we have agreed that Sergio will drive the company at least for the entire duration of this plan," Fiat Group Chairman John Elkann said at the Detroit auto show on Monday.
The Italian press has speculated that Marchionne, 61, could leave after the presentation of the business plan and following a long-pursued deal this month that handed Fiat full control over Chrysler.
Marchionne took the helm of Fiat a decade ago and in 2009 also started running Chrysler. He had previously said he could step down in 2015. Some analysts feared uncertainty over his future at the combined company could cloud the prospects for Fiat-Chrysler.
He now has the delicate task of listing the new company and probably establishing its headquarters outside Fiat's home country of the last 115 years.
Marchionne said on Monday that after Fiat buys the remaining stake of Chrysler -- which he hopes is completed this week -- a merger of the two companies is no longer needed. "At that point, Chrysler will be a fully owned subsidiary of Fiat S.p.A. and we then need to modify the corporate name accordingly to reflect Chrysler's long heritage," Marchionne said.
He said that the Fiat board will meet on Jan. 29 in Europe to approve the new name and other details of the integration of Chrysler within Fiat.
Elkann said: "I will remain chairman of the renamed company and Sergio will remain CEO. Do not expect any surprise on these issues."
A placement of shares of the renamed company on Wall Street to finance the three-year plan of investments could not technically happen sooner than the second half of 2014, Marchionne said.
There will be a succession, but definitely not before the conclusion of the industrial plan," Elkann said.
Any successor as CEO "should be an internal one," Marchionne said. Elkann and Marchionne discussed the need for candidates in a conversation on Sunday during which they pledged not to repeat the hasty terms of Marchionne's 2004 appointment, Marchionne said.
In May, Elkann named executives such as Richard Tobin, CEO of CNH Industrial, Fiat's truck and tractor affiliate; Lorenzo Sistino, head of CNH's Iveco trucks unit; Alfredo Altavilla, Fiat's European chief; Mike Manley, head of the Jeep brand; and Cledorvino Belini, head of Fiat in Brazil, as managers who have been groomed by Marchionne and could eventually run the company.
Elkann said Marchionne could stay longer than three years if he elected to do so.
Fiat has said the new strategy for Europe will focus on a revamp of its Alfa Romeo brand and keep production of the sporty marque in Italy as it seeks to fill underutilized plants, protect jobs and compete in the higher-margin premium segment of the market.
The company is battling to return its European operations to profit after a lack of investment in new models saw Fiat hit hard in a six-year market slump in its home region.
"The conclusion of the plan that we're going to be presenting in four months is crucial. And the board feels a lot better about this," Marchionne said, referring to the board's reaction to his extended mandate.
While recent data suggest the European car market has stabilized, Marchionne said he did not expect a quick upturn. "I don't see any major signs of a recovery [in Europe] in the next 12 months," he said.
Fiat said on Jan. 1 that it secured full ownership of Chrysler in a $4.35 billion deal that will be the biggest in the auto industry since Volkswagen Group agreed to combine with Porsche in 2009.
Marchionne plans to fully merge Fiat with the No. 3 U.S. carmaker to give Fiat the scale to compete globally with the likes of VW and General Motors Co. The combined Fiat-Chrysler will enable the automakers to pool funds and tighten cooperation between Fiat's Alfa Romeo, Lancia and Maserati brands and the Chrysler, Dodge and Jeep nameplates.
Reuters and Bloomberg contributed to this report
You can reach Luca Ciferri at email@example.com.