A version of this story first appeared in the August 2018 print edition of Automotive News Canada.
The paint shop at Fiat Chrysler Automobiles’ assembly plant in Brampton, Ont., was undergoing a promised upgrade this summer when the automaker’s visionary CEO, Sergio Marchionne, died July 25 at age 66.
The $325-million expenditure at the facility — a pledge made in 2016 contract talks with the union Unifor — was just a small part of the enormous legacy that the Italian-Canadian left on his adoptive country.
“He saved Chrysler,” said Unifor National President Jerry Dias, who represents about 9,600 unionized workers in FCA’s two Canadian assembly plants and a parts factory. “That is not an overstatement by any stretch of the imagination.”
Marchionne died of complications following shoulder surgery at a hospital in Zurich, Switzerland. His death triggered an outpouring of admiration for a man known for his out-of-the-box strategic, adept handling of politicians, his humour, a tendency to quote philosophers, and his preference for sweaters over business suits.
His death has also raised questions about the future of the auto industry powerhouse he forged out of two ailing companies, first rescuing Italy’s Fiat in 2004 and then bankrupt Chrysler in 2009 during the Great Recession.
“He was a true visionary,” said Dwight Duncan, a former Ontario Liberal finance minister who helped negotiate a joint $1.7 billion in federal-provincial government loans to Chrysler during the financial crisis.
“It will be up to the new executive team, the new board of FCA to determine how much of what he’s laid out that they want to pursue.”
Marchionne’s successor, Mike Manley, a long-time FCA executive and most recently global head of Jeep and Ram, has vowed to carry out his vision.
“My intention is to deliver on the plan as a strong, independent FCA,” Manley told analysts on a subdued quarterly conference held just hours after Marchionne’s death.
CHINA IS A TOP PRIORITY
Manley also said his first task will be to fix its challenges in China, where sales slumped in the second quarter amid an escalating trade war with the United States. The British-born Manley spent much of his career with FCA in Asia.
For Ontario, the hub of Canada’s auto sector, the stakes are high. Auto assembly plants generate huge returns in terms of jobs and taxes, and spawn thousands of related jobs in parts manufacturing. But automakers are increasingly demanding workers and government bear some of the costs.
Canada has been losing out on auto-industry investment as production shifts to Mexico and the southern United States, based on lower labour costs.
Of the US $123 billion that automakers have poured into their operations in the North America free-trade zone since 2009, $8.2 billion — less than seven per cent — went to Canada, according to data compiled by the Center for Automotive Research in Ann Arbor, Mich.
Future negotiations for new investment could be even tougher given the growing protectionist sentiment under U.S. President Donald Trump.
“I’m much more worried about that fool south of the border,” Dias said, referring to Trump’s threat to impose a 25-per-cent import tariff on vehicles.
PROTECTIONIST THREAT
Marchionne was seen as having a soft spot for his adopted country of Canada. His family moved to Toronto from Italy when he was 14 and he attained all three of his degrees — philosophy, law and business — at Canadian universities.
But industry analysts said he was also a tough-minded businessman who demanded the numbers add up.
“Canadians seem to think because he was an Italian Canadian that he had a special affinity for Canada,” said Kristin Dziczek, a vice-president with the Center for Automotive Research in Ann Arbor, Mich. “He wasn’t particularly sentimental when it came to hard business facts. It either made sense or it didn’t.”
WHAT ABOUT CANADIAN REID BIGLAND?
