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The Crisis Fiat Faced as It Lost an Indispensable Leader

A revealing excerpt on what the company risked with the sudden demise of CEO Sergio Marchionne.

A Fiat 500 on the streets of Arles, France.

A Fiat 500 on the streets of Arles, France.

Photographer: Ian Hanning/REA/Redux

On the morning of July 20, 2018, a warm Friday, a Fiat Chrysler corporate jet took off from Turin, Italy, with Chairman John Elkann on board. For the second time in a week, Elkann, a scion of Fiat’s founding Agnelli family, was crossing the Alps, headed for the University Hospital Zurich to try to discover what was wrong with his chief executive officer, Sergio Marchionne. Three days earlier, Elkann had been denied entry to the hospital’s intensive-care unit by Marchionne’s doctors who said it would be a violation of the patient’s privacy. The chairman hadn’t received an update on how the CEO was recovering from surgery he’d undergone at the end of June. No one at the company knew he’d been scheduled for the procedure.

Elkann had one issue on his mind. The company had told investors in its 2017 annual report that Marchionne was “critical to the execution” of its strategy, high praise yet high risk. Fiat’s market value had grown tenfold under Marchionne. What would happen if the superstar CEO—who ran three of the family’s huge companies—was incapacitated? Elkann had started evaluating options on the evening of his first visit to the Zurich hospital, as he headed to the airport after a walk by the lake with Marchionne’s partner, Manuela Battezzato. This second visit would be fraught: The company’s second-quarter results were due in five days, and media speculation was mounting over the CEO’s condition. As Elkann passed through the glass doors of the hospital, he saw Battezzato and, after speaking with her, came to the realization that his CEO was never coming back.
Marchionne ruled Fiat Chrysler Automobiles NV—and the Agnellis’ other car and truck companies, Ferrari SpA and CNH Industrial NV—with the help of his phones. For the most part, he used an iPhone with a profile picture of a red Ferrari passing a rival Mercedes at a Formula One Grand Prix. He gave out daily orders via WhatsApp to more than 50 people who reported to him directly. He seemed ruled by an obsessive attitude: “It is just right to get this done, it’s that simple,” he once said to Bloomberg Businessweek. The only time Marchionne’s phones got a rest was when he went to bed—and even that produced only a three-to-four-hour respite from meetings, emails, and texts each day.