The late Italian-born, automotive industry genius, Sergio Marchionne is one of the few CEOs who flourished out of the 2009 Global Financial Crisis. When times were tough Marchionne saw an opportunity that no one else did; taking Chrysler’s failing business and transforming it to an unprecedented performance level for the decade. Problem-solving is our forte at Prime Engineering and we believe the mindset and know-how of Marchionne is one to be emulated. We have put together a list of some of Marchionne’s best moves during his successful acquisition of Chrysler by Fiat.
Seeing the Value
One man’s trash was Marchionne’s treasure. On the brink of liquidation and owing billions in government loans, Marchionne had offered a partial acquisition of Chrysler that grew into a full acquisition a couple of years later. The company grew to be debt-free, paying off the government in the coming few years under the direction of Marchionne. Marchionne picked up the Chrysler business for almost nothing and approached it with an attitude that growing the business was the only option – alternatives simply did not include selling or closing the company.
Taking advantage of a globalised world
Globalisation has been a growing phenomenon projected to only accelerate in the coming years due to rapid development in technology. We at Prime Engineering have seen, first hand the benefits of technological advancement and its impact on a business’ productivity. We also strive to supply these innovations to our clients so that the efficiency of their own projects is ever evolving. In a globalised market, the doors to offshoring resources are opened. For Italy, this was bad news, with Fiat offshoring their fiscal, manufacturing and operating headquarters and locations to different countries around the world. It had the potential to leave Italian taxpayers with the unemployment benefit burden of Fiat’s thousands of ex-employees. For the value of the company as a whole, Fiat Chrysler was instead able to grow at a much faster rate by adapting to the mass production trends that other automotive giants were already utilising. It is also possible that without this diversification to their workforce Fiat Chrysler may have had less insight to real market demand if they were to be only observing from an Italian headquarters.
Jeep Focus
Picking the right eggs to put in the basket was one of Marchionne’s talents. For the Chrysler portfolio, this winner was Jeep. An American icon, Marchionne seized the brand’s lasting appeal and reimagined some of its iconic models to great success. Under Marchionne’s guidance Jeep global sales jumped from 730,000 in 2013 to 1.9 million in 2018. Marchionne’s successors are now left with the challenge of expanding the brand into the Chinese market, which if done correctly, should bring the company further fantastic growth.
Trend proactivity
If we had a crystal ball to predict every future trend in engineering and the potential challenges we may face with equipment, life sure would be a whole lot easier. Marchionne’s somewhat psychic ability with automotive trends was a blessing to the direction in which Fiat Chrysler took their brands. During the foreshadowing of an influential market trend, Marchionne would take large measures to ensure that maximum profitability was possible. A great example of this was Marchionne’s approach to the small car market and Fiat Chrysler’s Chrysler and Dodge product lines. When Marchionne realised that the Dodge Dart and Chrysler 200 were both underperforming, both products were canned rather than revised. This decision was made after Marchionne’s observation of other brands having already saturated the fuel-efficient, small car market. In coming years other brands like Ford, Toyota and General Motors all killed off similar products. Marchionne’s quick thinking approach meant that Fiat Chrysler did not have to take a substantial loss for the low demand product lines.
At Prime Engineering, we like to be on the cusp of innovation when it happens. Bringing the best products and services to you as soon as they are available. We love to improve the way equipment works through applying our technical expertise, industry know-how and cutting edge technology to deliver the engineering solutions for your specific needs. Contact us today to get your project running as efficiently as possible.
