Coverage: Fiat CEO Marchionne steps down due to ailing health

Fiat Chrysler Automobiles named Mike Manley, who had been the head of Jeep and Ram brands, as CEO Sergio Marchionne’s successor on Saturday and Ferrari’s board named John Elkann as its new chairman after announcing that Marchionne would be unable to return to work.

Randy Essex and James LaReau of the Detroit Free Press had the news:

Elkann also is chairman of FCA and heir to the company’s controlling founding family.

In a statement Saturday, he said, “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.

“My first thoughts go to Sergio and his family.”

Italian reports said Marchionne is in a clinic at University of Zurich. At his side, the reports said, were his two sons and his partner of several years, Manuela Battezzato, who works in FCA communications.

Neil Winton of Forbes.com writes that Marchionne’s departure might boost FCA’s stock:

Fiat Chrysler Automobiles announced Saturday that Marchionne, who rescued Fiat from bankruptcy in 2004 and acquired Chrysler after the financial crisis in 2009, had to quit his job because of ill health. He had been scheduled to retire in April 2019, and speculation about his successor had worried investors.

Marchionne’s successor Mike Manley has presided over a stunning revival at FCA’s Jeep and RAM subsidiaries.

FCA shares have been on the slide since they dived almost 10% after the June 6 meeting in Turin which outlined a 5-year plan. The strength of the plan was proving hard for investors to evaluate without knowing who Marchionne’s replacement might be. Since falling to 17.83 euros after the meeting FCA hares have slipped to a close of 16.42 euros Friday, according to Reuters’ data. The year 12-month high was 20.20 euros.

Colleen Barry of the Associated Press reported that Marchionne is credited for saving the company:

The Fiat-Chrysler merger remains the crown jewel in the 14-year Marchionne era, an accomplishment built on a series of daring plays.

In 2005, the trained lawyer who studied philosophy demonstrated his deal-making skill by getting GM to pay $2 billion to sever ties with Fiat as part of a failed cross-border tie-up. The money was pivotal to relaunching the failing carmaker.

Then in 2009, he secured a deal with a then-new U.S. President Barack Obama to take over bankrupt Chrysler without Fiat having to put a penny down in exchange for Fiat’s small car technology.

Other essential corporate moves included the spin-off of the heavy industrial vehicle and truck maker CNH and of the Ferrari supercar maker. Both deals unlocked considerable shareholder value for Agnelli family heirs.