Succession Talk at Fiat Chrysler Heats Up as Head of Maserati and Alfa Romeo Is Named
The promotion of a 48-year-old Canadian to head Fiat Chrysler Automobiles' (FCAU) - Get Reportglobal luxury automotive business is the latest sign that the horse race to succeed CEO Sergio Marchionne is heating up.
Reid Bigland, who also holds U.S. citizenship, was named to the post on Tuesday, replacing Harald Wester who had run Maserati and Alfa Romeo worldwide. Wester, 58, an engineer who began his career at Volkswagen, remains as FCA's chief technical officer to the two luxury brands.
Maserati and Alfa Romeo both have been saddled with delays as FCA has contended with the pressures of stretching scarce human and financial resources to cover regulatory, market and technology pressures in multiple markets.
Bigland, who runs FCA's North American sales and marketing, becomes one of four leading candidates to succeed Marchionne, whose employment contract expires in 2018 and who has said he intends to leave the company at that time. Insiders said the contenders for the top post at Fiat Chrysler include Mike Manley, the head of Jeep; Alfredo Altavilla, FCA's chief operating officer for Europe, Africa and Middle East; and Richard Palmer, chief financial officer.
Marchionne earlier in May took over as CEO of Ferrari, the Italian exotic car company that was spun off as an independent company from FCA last year. The Italian-born Canadian in 2009 also said he intended to leave the company in 2014, when his last employment contract expired. Today, however, Marchionne's prediction is taken more seriously, based on remarks at the North American International Auto Show in January.
In response to a question, he said he was fulfilling his obligation to find a successor:
"I'm grooming the turkey," he said. "Thank God we have more than one turkey that we can choose from ... the training exercise that people go through here is not for everybody because the washing machine rocks pretty hard. You've got to be able to go through the wash cycle, a lot of these people have got to handle multiple functions."
As a globe-trotting executive, Marchionne is said to put in grueling hours at the office, extending into the night and weekends, a pace he sets for those around him as well.
With a heavier debt load than rivals and some analysts forecasting a downturn in U.S. sales, FCA has tried to find alliance and merger candidates since the automaker hasn't yet achieved the size or scale that Marchionne has argued is necessary for financial viability. General Motors told FCA it wasn't interested in joining forces last year.
Fiat Chrysler shares have fallen 51% in value this year, compared with a Dow Jones Industrial Average that is slightly better than flat.
Bigland, who hails from Kamloops, British Columbia, started his career in the airline industry and then went to work in truck manufacturing, coming to Chrysler during its ill-fated merger with Daimler.
FCA may yet find a buyer or merger partner, meaning that the four contenders for the CEO's office could become high-ranking executives in a newly merged enterprise. Alternatively, one of Marchionne's "turkeys" could be filched by a rival interested in strengthening its own executive suite while weakening FCA's.
Fiat Chrysler shares were rising 3.3% in trading Tuesday afternoon.
Doron Levin is the host of "In the Driver Seat," broadcast on SiriusXM Insight 121, Saturday at noon, encore Sunday at 9 a.m.
This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.
