Tommaso Ebhardt Milan
FIAT chief executive Sergio Marchionne has tightened his grip on the Italian car maker by grabbing the top job at Ferrari ahead of the group’s Wall Street listing.
Marchionne orchestrated the departure of Ferrari president Luca Cordero di Montezemolo, who stepped down yesterday, three days after the Fiat chief executive criticised the unit’s Formula One performance and took issue with his offer to stay in the job.
Montezemolo, who ran Ferrari for 23 years, will make way for Marchionne on October 13, the same day that shares of Fiat Chrysler Automobiles start trading in New York.
“It’s even more of a one-man show with Montezemolo leaving,” said Giuseppe Berta, a professor at Bocconi University in Milan and the former head of Fiat’s archives.
Marchionne said the 67-year-old’s departure was the result of “misunderstandings” over Ferrari’s Formula One performance and followed discussions over the brand’s future.
Fiat shares rose 2.2 percent by 11.35am in Milan yesterday. The stock has gained 32 percent this year, valuing the firm at e9.84 billion.
The Formula One spat made headlines last weekend, but it masks a deeper divide over Ferrari’s role in the group.
The Maranello-based firm, 90 percent-owned by Fiat, is a key element of Marchionne’s plans to expand in luxury cars following the merger with US car maker Chrysler. Montezemolo, who took charge of Ferrari in 1991, wanted to maintain Ferrari’s autonomous status and not become like Volkswagen unit Lamborghini.
“Ferrari will have an important role to play within the Fiat Chrysler group in the upcoming flotation on Wall Street,” Montezemolo said in a statement. “This will open up a new and different phase which I feel should be spearheaded by the chief executive of the group.”
During Montezemolo’s tenure, the supercar brand boosted revenue 10-fold as sales more than tripled. He wanted to cap sales at about 7 000 cars a year to preserve Ferrari’s exclusive allure, while Marchionne suggested that Ferrari had more volume potential.
“Taking the helm of Ferrari gives Marchionne much more freedom to evaluate all the different options Fiat has for its supercar unit,” said George Galliers, an analyst at International Strategy & Investment.
Montezemolo, who was Fiat’s chairman from 2004 to 2010, teamed up with Marchionne after his appointment a decade ago to revive the car maker from the brink of bankruptcy. The Ferrari chief was not appointed to Fiat Chrysler’s board.
Tensions between Marchionne and Montezemolo were evident last weekend, when the Fiat boss criticised the recent performance of Ferrari’s Formula One team as “unacceptable”. He also took issue with comments from Montezemolo offering to continue running the brand for three more years, saying that “nobody is indispensable”.
The two executives had “worked side by side, sharing concerns, difficulties and successes”, Marchionne stated yesterday. “I want to thank Luca for all he has done for Fiat, for Ferrari and for me personally.” – Bloomberg