FCA Begins New Era on Somber Note

On the day his predecessor, Sergio Marchionne, dies, Michael Manley steps into his new role as FCA CEO announcing that one of the former CEO’s goals, positive industrial cash flow, is achieved for the first time at €500 million ($584 million) in second-quarter 2018.

Marchionne, credited with turning around the fortunes of Italian automaker Fiat and the No.3 U.S. automaker Chrysler, as well as forging the merger of the two companies in 2009, was stricken during recent surgery and was left unable to continue at the helm of FCA. Manley was appointed CEO on Saturday.

A statement issued by Fiat Chrysler Chairman John Elkann says: “Unfortunately, what we feared has come to pass. Sergio Marchionne, man and friend, is gone.

“I believe that the best way to honor his memory is to build on the legacy he left us, continuing to develop the human values of responsibility and openness of which he was the most ardent champion.”

Manley opened his leadership tenure by paying respects to Marchionne, whom he worked with daily for the past nine years.

“Sergio was a unique and special man who is going to be sorely missed,” Manley says, noting Marchionne’s values of “transparency, delivery and, most importantly, respect.”

His remarks were followed by a one-minute moment of silence on the quarterly call this morning with financial analysts and media.

Turning to the business, Manley notes the tough second quarter predicted at the Italian-American automaker’s June 1 Capital Markets Day backgrounder came to pass. However, Marchionne’s goal of achieving a net cash position did occur as the traditionally black-sweater-wearing CEO predicted with his “wearing of the tie” to commemorate the moment during the global financial-plan event in Italy.

FCA recorded a record profit of €1.4 billion ($1.6 billion) in NAFTA based on strong sales of Wrangler and Cherokee SUVs and the new Ram light-duty pickup. Manley says issues with Ram production are resolved and he expects full production in Q4. The company confirms €5.0 billion ($5.8 billion) profit for 2018.

Manley says the China market will be his immediate focus and for the balance of the year as duty changes impact sales and FCA launches the 7-passenger Jeep Grand Commander in the Chinese market.

A restyled Jeep Renegade and expansion of the company’s partnership with autonomous-vehicle company Waymo also will see heightened activity. Fiat Chrysler’s 5-year plan revealed at Capital Markets Day outlined an investment of $10.5 billion to develop new electric and hybrid vehicles.