Fiat will fill the sudden vacancy in its top management by picking Sergio Marchionne, the head of Swiss inspection group SGS and a Fiat director, to take over as CEO, a source close to the Italian group has told Reuters.
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The news agency said Fiat had to scramble to find a new chief executive after Giuseppe Morchio resigned on Sunday in protest at Ferrari chief Luca di Montezemolo being named chairman of Italy’s biggest industrial group, a post he was reported to have wanted himself.
Reuters said the storm, which hit just three days after former chairman Umberto Agnelli died, cast clouds over Fiat’s efforts to pull out of its crisis – Morchio’s turnaround plan is beginning to bear fruit, but a huge amount remains to be done.
“He is the man and will be presented as the new CEO on Tuesday,” the source told Reuters.
An SGS spokesman confirmed to the news agency that Marchionne would attend Fiat’s board meeting in Turin, scheduled for 1200 GMT on Tuesday.
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By GlobalDataAfter Fiat picks its fifth CEO in two years, Montezemolo is due to hold a news conference, the report added.
Reuters noted that Marchionne, a former accountant and chairman of Swiss chemicals group Lonza, will have to buckle down quickly to continue the Fiat turnaround and meet Morchio’s target of hitting breakeven at group operating level this year.
“He has a very good track record in share performance and is seen as one of Switzerland’s best managers,” Giovanni Bizzarri, fund manager at Banca Ifigest, told the news agency which noted that SGS stock has more than doubled since Marchionne became CEO in February 2002.
“He and Montezemolo both have great images, so it’s a winning duo from that point of view. In reality, it will take a year or two to see how good they are for Fiat,” Bizzarri reportedly added.
Reuters noted that Marchionne, 52, had been touted as a possible Fiat CEO in a previous round of management speculation but instead joined the board in 2003 to oversee the company’s turnaround.
Analysts told the news agency that however good a manager Fiat hired, it would take at least three months for the new CEO to get to grips with the tractor-to-robotics empire and that Fiat’s recovery was bound to be hampered by the shake-up.
“Fiat doesn’t have a minute to waste, but now middle management are left without a leader once again, which is going to slow everything down,” one auto analyst said.
Reuters said the Agnellis’ speedy choice of Montezemolo as chairman was welcomed as a sign Italy’s uncrowned royal family was still committed to the carmaker their ancestor founded 105 years ago and which they control with a 30% stake.
Instead, the family named two more from its ranks to the board on Sunday, including Umberto Agnelli’s son Andrea. John Elkann, the 28-year old grandson and heir of late Fiat patriarch Gianni Agnelli, was promoted to the post of vice-chairman, the report added.
