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John Elkann/Agnelli-s/EXOR, mentored by Marchionne, to grand success: NYTimes

Discussion in 'Fiat Global News' started by prabhjot, Aug 5, 2015.

  1. prabhjot

    prabhjot Esperto

    delhi ncr

    An important and succint yet analytically sound article in the New York Times about the stupensous success of John Elkann (and Sergio Marchionne) at managing and re-invigorating Fiat, Jeep etc but also the rest of the Agnelli family holdings (grouped under EXOR).

    The article is occassioned by the very audacious and canny and aggressive, without being overly risk-seeking, takeover just days ago for many billions of euro-s of Partner Re, one of the world's biggest and most profitable global re-insurance firms.

    Behind the scenes, mostly, at EXOR, while it is the other way around at FCA and Case New Holland Industrial etc is: that man again, Sergio Marchionne!

    Only and Italian or French businessman and manager and entrepremeur can have this sheer range of repeatedly proven abilities, across industries and across geographies, as Sergio Marchionne (+John Elkann), all in VERY VERY trying, recessionary circumstances. "Renaissance Man": holder of three advanced degrees, including one in philosophy in think, and raised, educated, and worked in several countries, speaking multiple languages, highly cosmopolitan etc etc.

    Only Tata Sons would seem to have this degree of cultural/intellectual/ethical ability as managers and entrepreneurs. At least I cannot think of any other top manager/promoter etc having this sort of range of ability and of success?
    asimpleson, whitepunto76 and bharath like this.
  2. whitepunto76

    whitepunto76 Regolare

    Very good and informative how well engineered FCA has at top management. The news you publish leave us mesmerized on global position of FCA compared to Indian market. Automotive Top giants have lot to learn from that Ranjangoan plant with Fiat Engineering playing all the time.
    prabhjot likes this.
  3. prabhjot

    prabhjot Esperto

    delhi ncr

    Marchionne said he would eliminate all net debt for FCA by early 2018, even as he would go on an all-new model launch and investment (in branding, marketing and distribution, plus of course plants and workers) spree. Here is a central way in which that will happen: the sale of Magneti Marelli (an industry leader in automtive lighting, and telematic+infotainment systems for among others BMW) to SAMSUNG for around 3 billion$.

    Evidently, and from his own confession, his first choice was for a LARGE merger with another big autofirm. That plan is still on, apparently, and awaits the next euro-american recession, but in the interim he will achieve those objectives of (a) eliminating net-debt by early 2018 (b) launching a slew of all-new models (well underway) through 2018-2020 for all brands in all world market-regions.

    Magneti Marelli is profitable and a great business with great IP plus a good record of innovation. BUT: it is not a high return-on-equity or invested-capital one, since the supplier industry is so competitive. That is why most other autofirms have long-since (barring a few Japanese ones) hived off or sold-off their parts, components and supplier arms.

    Selling MM makes sense for FCA and for EXOR (the Agnelli family holding company), then. Cearly, EXOR is positioning FCA for being a consumer/customer brand-centric (b2c) firm, as it (Marchionne is deputy chairman also of EXOR, which has many firms other than FCA such as ferrari and the Economist magazine etc) prepares for merging it and/or acquiring another large-ish car firm, if possible by the time M retires in 2019?
    Anup, PradeepM and rusticnomad like this.
  4. prabhjot

    prabhjot Esperto

    delhi ncr
    Another possibility, other than the approximately 3 billion$ outright-sale of Magneti Marelli is that some parts or all of MM will be spun-off and samsung brought it as a some-large-% JV partner.

    This would have 2 advantages. (a) FCA would get a billion or 2 $ to devote to debt-retirement, which Marchionne has comitted to achieving by early-2018 (zero net-debt).

    BUT (b) would ALSO position FCA very smartly as major technology leaders even in ev and hybrid tech, battery-related tech, as well as in hardware+software and other IP for connected cars, autonomous driving and the 'internet of things'. Samsung is making a large and high-capital-outlay into these areas already. For eg, they just 2 weeks ago bought a large share in BYD, China's leading EV car maker, and a world-leader.

    Between fca (via MM) and Samsung they'd have a great shot at becoming (among) the auto industry's leading suppliers of these emerging-technologies, for ALL firms not just FCA's own brands and models.

    M has already allied with Google on autonomous cars, and is also reportedly in serious talks with both UBER and Amazon on the topic of 'driverless' cars and delivery vans/commercial vehicles.

    M has been on record against car firms spending too much on deploying such technology on actually-for-sale cars/models, since they ALL lose money hand-over-fist, trying to compete for media praise and vague public perception with the disruptive firms that are said to and are seen to be soon muscling-in on the car industry (in the usa, europe, china and japan): Google, Apple, Tesla, etc.

    Playing this inevitable industry/technology disruption (by say 2020 or so?) via MM+Samsung rather than (only) via in-house, competitive but money-losing deployment on its own models and brands (as Nissan, GM, VW etc are doing) would seem a brilliant solution to the problem caused by these disruptive technologies and these non-traditional firms (google, apple, tesla etc). And actually making money while at it, unlike the many billions that some firms are having to cough up (vw, nissan, gm, bmw...) with no end in sight for when those investments will, if ever, payoff.

    FCA is launching its first plug-in hybrid vehicle later this year: the Chrysler Pacifica minivan. And has comitted to gradually offering hybrids at Maserati and Alfa Romeo, 2018 onwards. The 500e, a very well-regarded electric vehicle, uses electric tech from Bosch, while the Pacifica hybrid's tech is mostly in-house, including a e-cvt. It uses batteries from LG. Well, Samsung just got into the battery development and manufacture business too, on its own expensive account, so.

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