By Peter M. DeLorenzo
Detroit. I often refer to the “Swirling Maelstrom” in this column. What is it exactly? Part I of the definition is that it's the kaleidoscope of craziness that far too often overwhelms this industry, compounded by the mind-numbing realization that delusional thinking isn’t an aberration, but rather a full-on cocktail of absurdity that fuels this business often enough to the point that it becomes standard operating procedure.
Part II is that it’s the ugly realization that for every three positive steps taken forward in this business, there’s a corresponding and inevitably recurring stumble made up of five excruciating steps back. And it’s this unending cycle of unbridled brilliance punctuated by the festering stench of abject mediocrity that permeates and overwhelms almost every aspect of this business, which thus gives you a crystal-clear picture of the “swirling maelstrom.”
I am reminded of all of this this week because in the post-hangover from the PSA-GM deal, none other than that incorrigible King of Delusion, the one and only Sergio Marchionne, surfaced yet again to insist that he may take another run at GM, and if that doesn’t work, maybe even VW. Both automobile companies in question immediately dismissed Marchionne’s whimsical thought balloons out of hand. GM reiterated that nothing has changed and that it’s just not interested, and VW CEO Matthias Mueller saying, "I am pretty confident about the future of VW, with or without Marchionne." The unspoken feeling from both of these companies? Marchionne should just go back to his sweater farm.
Being The Great Sergio, of course, Marchionne considers the PSA-GM deal vindication of his brilliance because he suggested several years ago that consolidation of this industry is inevitable. Not exactly an earth-shattering notion I might add, but now he thinks that auto companies should be beating down his door just clamoring for a linkup with FCA, and he is frankly flabbergasted that these companies don’t see the brilliance of his vision.
Why is that, you might wonder? Why do companies avoid Marchionne like the plague? As I said a year ago it’s because both people and corporate entities find him ferociously unpalatable, utterly loathsome and flat-out untrustworthy. Now, this doesn’t necessarily mean that some corporate entity won’t make a deal with him, but it will never be on Marchionne’s terms, not in this lifetime at any rate.
I was frankly relishing not hearing from the self-proclaimed “G.O.A.T.” of late, because Marchionne had become so tedious and such a blowhard that to expend any energy on the guy had become a monumental waste of time. Has anything really changed during this recent lull of attention by the media and others? No. Marchionne is still feverishly working behind the scenes, trying to make something – anything – happen for FCA. That the clock is ticking on the whole convoluted enterprise is now freely acknowledged by all media and is an indisputable fact. Marchionne is a desperate man, busy flying around on the Linguini Express, touching down for talks with the Silicon Valley hucksters, or anyone else offering money for that matter, because he has simply run out of options.
The self-proclaimed “brilliant” dealmaker will need to summon all of his smoke-and-mirror skills to convince those skeptical sharpies that FCA offers even a modicum of desirability in an automotive environment that has clearly passed the company by. Marchionne is trying to project the company’s manufacturing ability as a meaningful reason for engagement, which is a complete joke considering the company continues to occupy the bottom rung of the ladder on any and all quality surveys. And pouring massive amounts of cash into Alfa Romeo isn’t helping his case either, because most experienced observers in this business consider that “Sergio’s Folly” - a pipe dream unworthy of the attention, or the investment.
And the funny-sad thing in all of this is that Marchionne’s massive, aircraft carrier-sized ego simply won’t allow him to understand this reality; he serenely shuffles along to the dulcet tones of his own thought balloons, absolutely convinced that he can force his will on anybody and come out smelling like a bountiful Italian garden in spring. The hubris of this guy knows no bounds. (As I’ve said previously, I wouldn’t be surprised if, after he shuffles off to his post-FCA riches, he forms a new religious order solely based around the concept of hubris – known as the order of Hubrissiani Marchionnes - so he can sit around all day and regale his acolytes with stories of his brilliance. No vow of poverty required.)
It isn’t helping matters much that the grim news continues to ooze out of FCA as well. Marchionne has found that it is exceedingly difficult to keep a lid on the river of negativity running swift and strong out of Auburn Hills. Executives - everyone from corporate lifers to the True Believers – started getting out in droves a while ago and that trend has continued unabated, the idea being to move as far away from FCA as possible to get away from the inevitable blast when the whole enterprise implodes.
This town is rife with stories - and resumes - of people who just couldn’t put up with the loads of crap shoved down their throats by Marchionne and his posse for one day longer. Because beyond the gaudy sales numbers (inflated by piles of cash on the hood, a growing mountain of subprime loan paper and reams of fraudulent sales data, which proved to be blatantly inflated) is the nasty reality that FCA is a teeming jungle of seething negativity and blatant hatred for what Marchionne and his minions have done to destroy all that was left of a proud company.
Sergio Marchionne’s specialty is as a consummate dealmaker, something he actually is truly gifted at. But the rest of his carefully orchestrated persona is total, unmitigated bullshit. Because beyond his dealmaking persona, the stark reality is that he’s nothing more than a carpetbagging mercenary looking for one last big score, and his true persona is about to be exposed, once and for all.
It is no wonder that there are no deals on the horizon for Marchionne and FCA. His recklessness and unbridled hubris have painted him in a corner with no escape in sight. He has assets – Jeep being the one grand slam home run in his quiver – but beyond that the whole enterprise is nothing more than questionable. And when you factor the money being pissed away on Alfa, it’s even worse than that.
I am absolutely certain of one thing in all of this, however, and that is when it all goes down, Marchionne won’t be entering into any negotiations from a position of strength. Instead, he will enter the room as a glorified accountant dressed in an ugly-ass sweater formerly known as “The Great Sergio,” just there trying to get the best deal for his boss.
And an entire industry will be licking its chops, looking forward to the day when the Unctuous Prick and his minions are forced to leave the stage, for good.
And that’s the High-Octane Truth for this week.