Fiat Chrysler Europe Chief to Step Down After New CEO Chosen
(Bloomberg) -- Fiat Chrysler Automobiles NV’s European chief has resigned after being passed over to replace ailing Sergio Marchionne as chief executive officer of the group.
The departure of Alfredo Altavilla, chief operating officer for the region, was confirmed Monday by the company in a statement. His exit deprives new Fiat Chrysler CEO Mike Manley of crucial management experience as he tries to steady the ship following the sudden loss of Marchionne, who was forced to relinquish his post of 14 years due to declining health.
Altavilla, 54, was a close aide to Marchionne, having overseen Fiat Chrysler operations across the globe. He was considered one of the three leading candidates for the top job, along with Manley and Chief Financial Officer Richard Palmer. Manley was selected Saturday as the new CEO, only days ahead of the company’s July 25 results presentation.
Altavilla’s resignation raises the stakes for when Manley addresses investors for the first time Wednesday as CEO. He was already facing pressure to show he was capable of moving the Italian-American automaker forward without Marchionne. He now has the challenge of proving he can unify veteran managers around him and prevent further turmoil in the executive ranks.
Altavilla’s resignation was reported earlier by La Repubblica and by Bloomberg News. He’ll stay on until the end of August, the company said. Manley will be interim Europe chief, after taking direct oversight of the North American operations from Marchionne over the weekend. CFO Palmer takes on added responsibility for business development.
Manley was set to meet with Fiat Chrysler’s top managers in Turin, Italy, on Monday for a group executive council meeting, the people said. The gathering marks the beginning of his tenure following Marchionne, who is credited with saving both Fiat and Chrysler during his 14-year tenure and increasing shareholder value 10-fold.
For more on Marchionne’s succession, see these stories
Fiat Chrysler began trading on Monday for the first time since it became clear Marchionne would be unable to return to work following shoulder surgery the automaker announced on July 5. Italian news agency Ansa said his condition is “irreversible,’ and he is in intensive care in a Zurich hospital following complications from shoulder surgery.
Fiat fell 2.1 percent to 16.06 euros at 1:53 p.m. in Milan, giving the company a market value of about $30 billion. Supercar maker Ferrari NV, which was spun off from Fiat during Marchionne’s tenure, dropped 4.4 percent after falling as much as 5.7 percent earlier. CNH Industrial NV, another Fiat spinoff, declined 2.3 percent, while Exor NV, the holding company for Fiat’s founding Agnelli family, was down 3.8 percent.
Manley faces “a difficult baptism” on the Wednesday earnings call, Bernstein & Co. analyst Max Warburton said in a research note.
CNH, the maker of Iveco trucks and Case and New Holland farm equipment, replaced Marchionne as chairman with Suzanne Heywood, managing director of Exor. It reports results on Thursday, while Ferrari, which appointed Philip Morris International Inc. veteran Louis Camilleri as its CEO, makes its quarterly presentation on Aug. 1.
Ferrari may be down more by year-end than Fiat Chrysler, Warburton said. Camilleri “has an easy job operationally. But he inherits an absurd valuation, a product plan that’s far from settled internally and 2021 financial targets that Sergio scribbled on a napkin and that may be difficult to deliver,” the analyst said.
Manley has been head of Fiat Chrysler Automobiles NV’s Jeep brand since 2009, the linchpin in the company’s plan to double profit in the next five years. Already, the Jeep and Ram vehicles he oversaw were responsible for 67 percent of total U.S. volume in 2017, according to Bloomberg Intelligence.
Marchionne, 66, had been set to retire in April 2019. His unexpected illness accelerated the timeline for a decision on succession that was already seen as a crossroads for the company. Who would run the Italian-American automaker was just the first of a number of pivotal choices -- like whether to remain independent -- facing Chairman John Elkann, an Agnelli family heir.
Manley’s do-list ranges from electrifying the lineup to boosting luxury brands Alfa Romeo and Maserati, to raising the profile of Jeep in China. He also faces the test of meeting rigorous fuel-economy standards in Europe and China, along with managing through political uncertainty in Italy, and trade fears in the Nafta zone and between the U.S. and European Union -- both important areas for Fiat Chrysler.
“People are going to wonder -- the products are there, the decisions have been made, but who’s going to be driving the strategic options?” said Brian Johnson, an analyst at Barclays Plc. If there are deals to be made for Magneti Marelli, the parts unit set to be spun off to shareholders, for example, “Who’s on point for that?”
Altavilla, 54, was a Fiat veteran who was head of business development and chief operating officer for Europe, the Middle East, and Africa, operations he returned to profit after years of losses. The Taranto, Italy, born-executive was deeply involved with Marchionne in the acquisition of Chrysler, attending all the meetings and holding talks with the U.S. government. His father owned a Fiat dealership.
Altavilla is also a director at Telecom Italia SpA, Italy’s biggest phone company. He was part of the slate proposed by Elliott Management Corp. that defeated Vivendi SA to take control of the carrier’s board in May.
Manley, a Briton, is known for having a good rapport with dealers, which makes sense because he used to be one. He started working at Swan National Motors in Aberdeen, Scotland, in 1986, and rose up through the U.K. system before joining DaimlerChrysler in 2000 to run its dealership network in the country.
He was named head of Jeep at the start of Fiat’s five-year acquisition, and led the transformation of the iconic American brand into a cash machine. Analysts estimate that Jeep alone could be worth the entire market value of Fiat Chrysler.
Colleagues describe Manley as serious and driven, a ferociously hard worker who inspires loyalty among his top lieutenants. He’s candid, true to his word, and a good listener, but he also does not suffer fools, said David Kelleher, a Philadelphia-area Jeep, Ram and Chrysler dealer who has worked with Manley during his decade-long stint on the company’s U.S. dealer council.
“When he sits in a room, if you’re not a guy that works 80 hours a week, you’re going to have a tough time keeping up with him,’’ Kelleher said. “He doesn’t know what a weekend is; he’s very much a protege of Mr. Marchionne.”
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