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Elkann New Ferrari Chairman as Marchionne Passes

The boards of carmakers Fiat Chrysler and Ferrari met separately on Saturday July 21, to discuss succession plans for Sergio Marchionne, who was chief executive of both companies. He had been on medical leave for a month and soon after passed away on July 25.

John Elkann, the scion of Italy’s Agnelli family which controls both Fiat Chrysler (FCA) and Ferrari, was named Chairman at Ferrari. Piero Ferrari remains as Vice-Chairman. Louis Carey Camilleri, a Ferrari board member and former Chairman of Philip Morris International, was named as Ferrari’s CEO. Sergio Marchionne had been both Chairman and CEO at Ferrari. Mr. Camilleri has assumed the CEO role with full powers until Ferrari shareholders can confirm his appointment in an upcoming meeting.

Sergio Marchionne had recently undergone shoulder surgery and had been in recovery, but complications after the fact, said to be a stroke, worsened his condition to the point where he was unable to recover. He had planned to retire from the helm of FCA early in 2019 but planned to stay as Ferrari Chairman and CEO until at least 2021.

Sergio Marchionne had instituted many changes at Ferrari, not the least of which was taking the company public in 2015. The resulting sharp increase in overall valuation (price-to-earnings ratio of over 30) and in company profits (profit margin of 25-30%) has been significant and proved his financial vision was correct. He had other plans for Ferrari, including a ramp-up in production from 7,000 to 9,000 vehicles (eventually 10,000), the planned launch of a sport-utility vehicle, a move toward electric vehicles starting with hybrids, a new model range and a possible “continuation series”, among other ideas. We’ll have to see if his successors plan to follow through. Mr. Marchionne had also promoted the company to investors and analysts as a “luxury” company with other luxury items coming on-stream besides high-priced sports cars, but nothing had been revealed as yet.

He was also in the middle of some hard bargaining with Liberty Media, the new owners of Formula One, about future involvement, cost containment, prize money, TV income distribution, etc. His passing leaves these issues temporarily unresolved.

On the FCA front, Marchionne turned around an ailing Fiat when he took over more than a decade ago and turned it into a success. He merged Fiat with a dying Chrysler and saved that brand too, all the while reducing Fiat’s huge debt and bringing it back to health. Jeep brand boss Mike Manley was appointed Marchionne’s replacement at Fiat Chrysler, where Marchionne was CEO.

In December 1997, John Elkann was selected by his grandfather Gianni Agnelli to take the place in the family business of Giovanni Alberto Agnelli, the son of Gianni's younger brother, Umberto, who had died at the age of 33. In 2003, he joined IFIL (now Exor) and worked on the turnaround of Fiat Group. Elkann was instrumental in the appointment of FCA CEO Sergio Marchionne, in May 2004. After the deaths of Gianni Agnelli in 2003, and his great-uncle Umberto Agnelli in 2004, Elkann became Vice Chairman of Fiat and in 2010, he became Chairman of Fiat S.p.A. We wish him the best in his new role.

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