Manley Takes The Wheel At Fiat Chrysler Sooner Than Expected As Marchionne Exits On Failing Health

Fiat Chrysler Automobiles NV FCAU announced Saturday that outbound CEO Sergio Marchionne, who had been phasing out of his 14-year leadership, wouldn't return to his role after suffering complications from surgery.

The board appointed Mike Manley, the former head of Jeep and Ram who had already been transitioning to CEO, Marchionne’s immediate successor.

Why It’s Important

Marchionne had driven Chrysler out of its government bailout, led a turnaround in Fiat, and took Ferrari RACE public to bring forth the best performing auto stock in the world, according to The Revs Institute’s Paul Ingrassia.

His abrupt exit was lamented both on the Street and at FCA.

“We met at one of the darkest moments for our company and it was his intellect, perseverance and leadership that saved Fiat,” President John Elkann wrote in a letter to employees. “He also achieved a remarkable turnaround at Chrysler and, through his courage in forging the cultural integration of the two companies, he established the foundations for a more secure and brighter future for us to take forward.”

Manley, a European like Marchionne, has 18 years of experience at the company and led Jeep to consistently outperform itself in year-over-year sales. In fact, Jeep sales have improved four-fold since Manley took the wheel in 2009. Ferrari’s Board named Elkann as new Chairman to replace Marchionne.

The news prompted a 2.5-percent drop in FCA’s pre-market trading. Ferrari's stock was down about 4.3 percent.

What’s Next

Manley will embrace and execute a plan outlined by Marchionne to push FCA toward industry-leading profits in 2022.

In the coming days, Ferrari’s Board will propose to shareholders that Louis Camilleri be named as CEO.

FCA will report earnings Wednesday.

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Fiat Chrysler CEO Sergio Marchionne speaks to reporters Jan. 15 at the North American International Auto Show at Detroit's Cobo Center. Photo by Dustin Blitchok.