Following the resignation of the European head of the car maker Fiat Chrysler because he had been over looked for the top post of the company, the newly crowned CEO of the company – Mike Manley has now also to look after the additional role for the carmaker’s European business. this adds to the problems faced by Manley.
Following the serious illness of the former CEO of the company Sergio Marchionne, Manley was chosen for the top job. He was the head of the jeep division of the company.
Resignation of Alfredo Altavilla, head of its business in Europe, Middle East and Africa was confirmed by Fiat Chrysler Automobiles (FCA) on Monday and the company handed over those responsibilities to Manley for an interim period.
Having joined Fiat in 1990, Altavilla was a contender for the top job together with the company CFO Richard Palmer.
There was limited market reaction to the sudden departure of Marchionne because he was set to retire as the head of the world’s seventh largest carmaker in April 2019. After falling by more than 5 per cent, the shares of the company gained some momentum to settle at a position of 1.7 per cent fall.
“The downside may be modest, at least in the next 12 months. But long-term concerns will build – Marchionne ran FCA in a command and control style, with constant firefighting measures,” said Bernstein analyst Max Warburton.
The strategy that was outlined by Marchionne last month would be followed by Manley, said FCA.
In a strategy to double its operating profits by 2022, the company has set a strategy for ramping up production of sport utility vehicles and make investments in electric and hybrid cars. The company also has set new and high targets for its jeeps.
However, for Ferrari, the future is not as clear. Marchionne was supposed to head the brand till 2021 after the luxury car maker was spun off about two years ago. There was a drop of 5 per cent in Ferrari shares.
A clear message that FCA would stay on course and would retain its jeep brand at the core of its plans for growth was evident in the board of the company choosing the 54-year-old Manley who had led the jeep division to phenomenal success and increased jeep sales four times, say analysts.
Reestablishment of individual brands of the group would is expected to be done under the new leadership. That would include revamping the Fiat brand in Europe, e the Chrysler in the United States and Alfa Romeo – a loss making venture in which millions of euros have already been invested.
“FCA has a defined way forward, the management was chosen by Marchionne which reassures, and the choice to focus on Jeep is a winning bet, but I still plan to sell for now to lock in a profit as the sudden change creates uncertainty,” said Umberto Borghesi, chief investment officer at London-based Albemarle Asset Management. “We need to see if they can execute the plan.
(Adapted from Finance-Yahoo.com)