Car News

Fiat Chrysler loses its driving force as a bumpy road lies ahead

Sergio Marchionne, former CEO of Fiat Chrysler, at the 2011 North American International Auto Show in Detroit.

Fiat Chrysler Automobiles was facing an uncertain future even before the man who led its unlikely turnaround became gravely ill.

The company was forced to hastily replace Sergio Marchionne, who led the company for 14 years, over the weekend and must find a way to deal with its own shortcomings without him — even as the auto industry experiences changes.

Now, the hard decisions fall to the new chief executive, Mike Manley, who has been running the arm of the company that is easily its best reason for optimism.

The Italian-American automaker has reported steady earnings, driven by the Jeep and Ram brands that have been run by Manley. But the Fiat, Dodge and Chrysler nameplates contribute little to its bottom line.

The company lags its rivals in China, the world’s largest auto market, and gets three-quarters of its profits from North America, where the entire industry is experiencing a slowdown.

Competitors like General Motors and Ford Motor have sped ahead with development of electric vehicles and self-driving technology, while Fiat Chrysler has been slow to do the same. It does not operate its own financing company, a competitive advantage for its rivals who are able to offer attractive discounted loans and leases.

And the possibility that President Donald Trump could push for tariffs on imports of cars and auto parts has sent uncertainty rippling through the industry.

“Sergio has done an incredible job revitalizing the company since Chrysler’s bankruptcy in 2009,” said Rebecca Lindland, an analyst at Kelley Blue Book, an auto research firm. “But there’s more work to be done.”


Now Fiat Chrysler, which has seen its stock lose 20 percent of its value since January, must do it without Marchionne, 66, who became incapacitated from complications following shoulder surgery July 5.

Fiat Chrysler will provide a fresh glimpse of its finances Wednesday when it reports its second-quarter results. Wall Street analysts expect a rise in earnings, driven almost exclusively by robust Jeep and Ram truck sales.

The company’s profitability is perhaps the central issue that Manley will have to tackle. In June, Marchionne and his executive team laid out a business plan that calls for spending 45 billion euros to develop more than two-dozen new vehicles, including electric models, all while slashing costs by 9 billion euros.