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CEO Change Won’t Hinder FCA and Ferrari Brands

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Despite an emergency CEO announcement, Fiat Chrysler Automotive (FCA) and its iconic brands will do well. As will Ferrari, contrary to the critics.


Wall Street becomes uneasy quickly when surprises happen – especially when those surprises involve a change of CEO. Over the weekend, the FCA board held an emergency meeting to announce that Mike Manley, the CEO of its Jeep Division, has been appointed CEO of the entire company. This occurs in the wake of the sad news that incumbent CEO, Sergio Marchionne, has suffered health issues after shoulder surgery and won’t be returning to the company. Marchionne was also CEO of Ferrari; in an accompanying announcement, Louis Camilleri, a Ferrari executive, was announced as its new CEO.


Upon these announcements, shares of FCA were down 3% in premarket trading and shares of Ferrari were down 4%. I believe that is a mistake from short-sighted profiteers who are not thinking about the long-term growth potential of FCA’s popular and established brands or considering Ferrari’s prospects.


Here’s why I think FCA, family of brands, and Ferrari will prosper under the new CEOs:


  1. The ailing Marchionne has been credited with making smart, strategic moves to improve FCA’s capital efficiencies and to target its future investments in the best brands in the portfolio, including Jeep, Ram, Alpha Romeo and Maserati. The company has a very sound five-year plan and the ability to invest in its business.


  1. The tough decisions and plans to redirect investments from less exciting, lower-cost brands and models, to those with the greatest potential are already behind FCA. It was only seven weeks ago on June 1st, when the CEO unveiled the company’s five-year plan, which was done with the knowledge that Sergio would be stepping down as CEO in one year. When a Wall Street analyst questioned the wisdom of a non-invested CEO releasing a 5-year plan without a successor identified, Sergio had, in my opinion, a perfect response. He stated, “I would count on my successor to adapt the plan as he chooses, but fundamentally, the call has been made” on the company’s strategy.


  1. Mike Manley, FCA’s new CEO, was one of the chief architects of the strategic planning team working with Marchionne. He is already on board with the strategy and has the power to execute it with the improvisations which he so chooses to execute. He did extremely well with Jeep and should excel with all FCA brands.


  1. Louis Camilleri, Ferrari’s new CEO, was the former chairman and CEO of Philip Morris and is dubbed by some as the “Marlboro Man”. Automotive critics say they are worried that a consumer guy like Camilleri, not a car guy, is now running Ferrari. However, I am excited about Camilleri because he is passionate about the brand – he owns a significant personal collection of Ferraris himself. I expect he will use his brand smarts and creative innovation to ensure the Ferrari brand becomes more revered by older and younger generations alike.


The Korn Ferry Institute published, “The Risky Business of CEO Succession”, a study which outlined the top 14 risk factors, as determined by interview surveys of corporate executives. When I read this, I concluded that Fiat Chrysler Automotive is prepared. They had a strategic plan in place before the CEO changes were made and a crop of high performing executives who were prepared for the future. That future is in their hands.


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Marketing Agency Blog Post Author of CEO Change Won’t Hinder FCA and Ferrari Brands

July 23, 2018
Written by Tom Sullivan

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