Fiat is where it is now because of Sergio Marchionne

Article by Christian Andrei, on October 28, 2011

Fiat CEO Sergio Marchionne has been frequently criticized by his fellow Italians but he does have several reputable people on his side. One of those is, Giuseppe Volpato who believes that Fiat is where it is now because of Marchionne. The Venice University business school dean, who has authored two books on Fiat, explained that when Marchionne became part of Fiat in June 2004, it seemed impossible that the company’s auto division could be rescued.

The most feasible pre-Marchionne option would be to pressure General Motors to control Fiat Auto.

In March 2000, the U.S. giant acquired 20% of Fiat Auto for $2.4 billion and was contractually obliged to purchase the rest of the 80%. "If GM had bought Fiat, what would Fiat be today?" Volpato enquired. The probable answer is that it would already be closed, considering what GM, which had to submit for U.S. bankruptcy protection in 2009, has been doing to its underperforming units within the last several years.

Saab was dumped. Hummer was closed. Opel/Vauxhall was almost sold. Fiat would have been fortunate to thrive.

Although Fiat has several problems to beat, Volpato said that due to Marchionne, "it is still alive, kicking - and owns Chrysler." Fiat’s guidance for this year - combining its share in Chrysler’s results - requires revenue in excess of 58 billion euros. The ending trading profit - operating profit before unusual items - must be at least 2.1 billion euros with a net gain of 1.7 billion euros. [source: AdAge]

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