Sergio Marchionne was replaced as chief executive of Fiat Chrysler Automobiles on Saturday by the head of the firm’s Jeep division, Mike Manley, after the health of the automaker’s long-time boss had deteriorated sharply following surgery.
Mr. Marchionne, 66, who rescued Fiat and Chrysler from bankruptcy after becoming head of the Italian automaker in 2004, had announced plans to step down from FCA next April but nixed that because of his failing health. The FCA board announced the decision to replace him at the end of an urgently convened meeting.
Mr. Manley, 54, the Jeep brand’s president and chief executive officer, has led that division of the company since 2009. As Fiat Chrysler’s new chief executive officer, he will oversee all FCA divisions.
UAW Local 12 President Bruce Baumhower, one of the Toledo area’s highest-profile labor leaders, was pleased. Though the sudden change took the business world by surprise, he said it appears to be an orderly transition that local Jeep workers and others should be comfortable with.
"If we had had a say in it, we would've picked Mike Manley," Mr. Baumhower said.
“FCA communicates with profound sorrow that during the course of this week unexpected complications arose while Mr. Marchionne was recovering from surgery and that these have worsened significantly in recent hours,” the automaker said in a prepared statement.
The British-born Manley, who reported to Mr. Marchionne, will implement a strategy designed to ensure FCA has a “strong and independent future,” the statement said.
Chrysler CEO Sergio Marchionne, left, with Jeep brand CEO Mike Manley to his right, speaks to reporters during a roundtable discussion at the North American International Auto Show at Cobo Center in Detroit in November, 2010.
Mr. Marchionne had stood by Jeep, asserting at the North American International Auto Show in Detroit last January the Toledo-based product was not up for sale.
“We’re not going to break up anything,” Mr. Marchionne said, shooting down reports from last summer that had suggested Fiat Chrysler might sell the Jeep brand to a Chinese automaker.
Now comes Mr. Manley, who is a lot more familiar with their iconic product.
He also understands the shared history between Toledo and Jeep, and is familiar with the Toledo work force, Mr. Baumhower said.
"My first hope is that Mike Manley keep the commitment that Sergio made to keep building Jeep Wrangler for global distribution in Toledo," Mr. Baumhower said.
The Wrangler is Jeep’s most recognized product. The latest generation of them debuted this year, the first major upgrade since 2006. At least 300,000 Wranglers are to be built at the Toledo Assembly Complex in 2018, an increase of about 20 percent over last year.
Mr. Manley told The Blade last November he thought the changes made to the Wrangler in 2018 “future-proofed” that particular type of Jeep for the coming years. The article based on that interview stated how Mr. Manley and Mr. Marchionne both have praised the company's Toledo work force for going above and beyond to meet demand for the Wrangler by working overtime and squeezing out inefficiencies.
"What the plant has been able to do every single year is produce more than our expectations going into the year. That, to me, is really the measure of a phenomenal working relationship,” Mr. Manley said for that article.
Fiat Chrysler has about 4,700 employees at the Toledo Assembly Complex. Hundreds more work for area suppliers that make parts for the Wrangler.
Mark Epley, the UAW unit chairman at Toledo Assembly Complex, said the impromptu change-in-command shouldn't affect Toledo-area workers in their day-to-day duties at the plant.
In two interviews last January, Mr. Manley told The Blade that 2018 is an important year for Jeep. Besides the roll-out of next-generation Wranglers, FCA debuted a significantly refreshed Cherokee on Tuesday.
Mr. Manley said he's been pleased by both the buzz the new Wrangler has created and the early orders put in by dealers.
"Of all of the time I've been in this business, the early reaction of Wrangler has been amongst the best I've ever seen," Mr. Manley said.
That same month, he didn’t rule out the possibility of other types of Jeeps being developed, saying the current portfolio was “by no means” full of all models the company will produce.
"Segments continue to develop, opportunities continue to emerge,” Mr. Manley told the newspaper back then. “There are a number of other things I'd like to do with the portfolio in coming years."
Jeep’s history is steeped in patriotism, when the Toledo-made Willys MB helped the Allies win World War II.
Toledo-based Willys-Overland built 370,000 Jeeps for the military during World War II. The company quickly shifted over to civilian production as the war drew down. In subsequent decades, millions of Jeeps have been sold around the world.
The announcement about FCA’s change in leadership was made in Italy.
Fiat Chrysler said in a statement that due to his deteriorating health Mr. Marchionne “will be unable to return to work.”
In this January, 2015 file photo, Sergio Marchionne, left, Chief Executive Officer, Fiat Chrysler Automobiles; Michael Manley, President and Chief Executive Officer, Jeep Brand and Reid Bigland, President and CEO of Alfa Romeo, North America watch at media previews for the North American International Auto Show in Detroit.
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Mr. Manley had been one of Mr. Marchionne’s closest collaborators.
Fiat is considered a close-knit family, and FCA chairman John Elkann said he was “profoundly saddened to learn of Sergio’s state of health. It was a situation that was unthinkable until a few hours ago, and one that leaves us all with a sense of injustice.”
Mr. Elkann didn’t give details of Mr. Marchionne’s health problems, adding that his “first thoughts go to Sergio and his family.” He asked everyone to respect Mr. Marchionne’s “privacy and that of all those who are dear to him.”
Mr. Elkann is a grandson of the late Gianni Agnelli, the longtime Fiat dynasty chieftain.
The boards of Ferrari and CNH Industrial, which make heavy machinery and trucks, were called urgently to meet on Saturday in Turin, Italy, Fiat’s headquarters.
Ferrari announced that Louis Camilleri, an Egyptian-born Maltese and longtime executive at Philip Morris International, the tobacco company, was chosen to be replace Mr. Marchionne as CEO of the sports-car maker.
Known for sleeping only briefly each night, Mr. Marchionne, who is also a lawyer, had been holding multiple leadership roles in the companies, notably as CEO of FCA — Fiat Chrysler Automobiles, as well as CEO and chairman of Ferrari.
Blade wire services were used in this report.
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