The world according to Marchionne

Nobody gave Fiat a ghost of a chance of survival less than a decade ago. It was the same for Chrysler three years ago, when it was plummeting into a bottomless pit. Both companies are out of the woods now, thanks to a turnaround artist who goes by the name of Sergio Marchionne.

The CEO of Fiat and Chrysler is clearly the auto person of 2011, who achieved the impossible in bringing Chrysler once again into the black. This happened at a time when even the most sanguine individual had given up hope on this once iconic American carmaker.

Marchionne is now looking at production of more than 4.5 million units of Fiat and Chrysler vehicles this calendar, and nearly six million vehicles in 2014. By then, Fiat will have a 60 per cent stake in the company, something which was inconceivable some years ago, when the Italian carmaker itself was walking the tightrope.

THIRD PARTY ALLIANCE

The global automobile industry has had its share of titans, the men who were distinct from the boys. The turn of this century saw Carlos Ghosn emerge the favourite poster-boy, after he successfully integrated Renault and Nissan. It was no mean achievement, and this move has been the best piece of news to both companies, especially in these troubled times, when consolidation is the name of the game.

Marchionne, likewise, is the clear winner in this decade. He steered a troubled Fiat out of trouble and pulled off the impossible by gaining a critical foothold in North America through the Chrysler marriage. He isn't done yet. Today, Marchionne believes that a third party is imperative to this alliance, and talks are already doing the rounds of roping in PSA Peugeot Citroen.

Fiat, of course, is no stranger to India, thanks to the decades-long association with then partner, Premier Automobiles. To that extent, it has the kind of brand recall that some other carmakers would give their right hand to have. Yet, the company blew each opportunity that came its way, and continues to struggle even today. To a whole lot of us, it was infuriating to see Fiat go out of its way to get itself into a mess when the market was there for the taking, especially with cars like the Uno and Palio.

The tie-up with the Tatas signalled a serious move to get on course again, and even though the joint retail drive hasn't yielded any results, it helped Fiat restart operations at a brand new plant. Marchionne was in Delhi at the 2006 Auto Expo to announce the alliance with Ratan Tata. Most Indian journalists were hearing him for the first time and his charisma was more than evident as he discussed Fiat's joint vision with the Tata group.

INTERVIEW OF A LIFETIME

It was towards the second half of 2008 when I managed to see Marchionne at closer quarters during an Italian embassy dinner in Delhi. When most of the guests had departed, I gingerly went up to him and asked him if he was ready for an interview. To my surprise and delight, he readily agreed, and what followed was an insight into the man's incredible thinking.

He spoke of the new Fiat which had managed to do a couple of things successfully with ‘some intelligence and luck', especially on its brand positioning, which was now consistent with consumer needs and demand. As Marchionne put it, the real impetus for an organisation like Fiat was to ‘be continuously ready to try and change its position in the market place'. Remember, this interview was well before the Chrysler deal and it clearly showed which direction he wanted to steer Fiat into.

Naturally, I was curious to check out his impressions of Ratan Tata and what the alliance meant to Fiat. Marchionne was quite open in his praise and said it was a pleasure to work with Tata because neither of them had had a disagreement.

“Sure, we have had differences of view which have been quickly reconciled but never a fundamental disagreement. There are times I discuss the weirdest things with Ratan, but that is the way we are. We are friends first and businessmen second,” he told me.

He went on to say that the Tatas had shown the way with ambitious projects like the Nano which, in his view, wasn't just about the price tag alone. “Some of the things that the Tatas have done not only on the car side, but in terms of their industrial holdings, are incredibly courageous and very long-term. Their approach to globalisation is interesting and one of the greatest things that I found out about the Tatas is the vision and commitment that they have to nation building in India, which somehow the rest of us have forgotten,” Marchionne said.

It was an interview of a lifetime, for it isn't too often that you sit across the table with one of the most powerful global honchos who, in turn, carries his power so easily and is completely disarming.

FIAT'S FUTURE PLANS

Will Marchionne pull off another surprise this time around in India? For the moment, this country is clearly not on his priority list. He has made it clear that the most important task on hand is to strengthen the Chrysler bonding from the viewpoint of launching new products and improving the financials. To that extent, the more relevant emerging markets, at least till 2014, are Brazil (where Fiat rules the roost), Russia and China.

Will India take over post-2015, and see a wider array of both Fiat and Chrysler products? There is a strong likelihood of this happening, especially with the country's dominance in small cars, which is also Fiat's strength. It was clear from my interview that here was a man who knew exactly what he wanted, and when. India may not be on his radar for the moment, but when the time is right, he will ensure that Fiat is prepared to go all out. The company just cannot afford to miss a market poised to be among the top three globally by 2020. It may be appropriate to wrap up this article by recapping what Marchionne had to say during the unveiling of the new Fiat Panda in Italy nearly a month ago. “In a nation where often those who cry the loudest win, where those who talk a lot, often listen little and do even less, where people give their best in front of the camera rather than in real life, the people at this plant represent hope.

“What you see before you here today is an example of the Italy that works, that overcomes challenges, that part of the nation that doesn't just throw in the towel or lose itself in idle words, but applies itself and works to do, to build, to progress. We know that we have a difficult period ahead, but we also know that responsibility for getting this country going again doesn't just rest with our politicians,” he said.

Any doubts why Sergio Marchionne stands tall in the automobile industry? Or that he may just pull out another rabbit out of the hat?

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