By Peter M. De Lorenzo
Detroit. Last June, in a column entitled “Brother Sergio’s Traveling Salvation Show Is Running Out of Gas” I had the following to say about the looming FCA trainwreck because of Sergio Marchionne’s runaway infatuation with Alfa Romeo:
“Why are Marchionne and his espresso-swilling minions deferring spending money on future product programs to conserve what little cash flow they have? Because Marchionne is pouring everything he’s got into Alfa Romeo.
Let me revisit that because the true meaning of it resonates to a level of flat-out stupidity that is simply impossible to comprehend. Marchionne is delaying future Jeep, pickup and Chrysler product updates – and putting some on hold altogether – so that the company can execute his ‘vision’ for Alfa Romeo.
You remember Sergio’s Alfa Romeo ‘folly,’ right? This is the one where he repeatedly stated that Alfa’s sales target was 70,000 in the U.S. market. In fact he promised with classic Sergio bluster that Fiat dealers would be swimming in Alfas – and Alfa profits – by 2016. Except that never happened. And Fiat dealers who were promised that – and who were urged to spend real money on brick and mortar to construct new stores - were then told that not all of them would be able to sell Alfas.
But it gets worse.
The latest chapter in Marchionne’s ‘folly’ has him insisting that Alfa Romeo will be the next Audi, not only in terms of brand stature - which, considering it has taken Audi 30 years to get where they are today, is a level of delusion that is jaw-dropping even for this town - but also in actual sales, as in real live market share. In fact, Marchionne is promising that FCA will be selling upwards of 75,000 Alfa Romeo cars in the U.S. By 2018.
Think about that for a long and hard moment. Pinning the future of FCA on having the Alfa Romeo brand going from zero-to-Audi in less than three years is not just ‘folly,’ it’s pure, unadulterated, egomaniacal absurdity.”
Sergio’s bombastic boasts never sat well with me because I saw him for a who he truly is: an opportunistic, carpet bagging, deal maker shilling for the remnants of the Fiat “dynasty” who would stop at nothing to line his or his overlords pockets. Even if it meant swindling Fiat dealers, media-types and analysts with equal abandon in the process.
Sergio’s ludicrous, "blue sky" pronouncements of what Alfa Romeo would become for FCA started seven long and tedious years ago, and the boasts and “It won’t be long now!” promises got worse seemingly by the quarter.
Lo and behold last week, The Great Sergio tried – as quietly as he possibly could – to walk back on the whole Alfa Romeo thing, saying, as the Detroit Free Press reported, that the growth plans for Alfa Romeo and Maserati had to be reevaluated in the wake of China’s more restrictive import policies. “I still think that Alfa belongs in China,” Marchionne told Wall Street analysts on Wednesday. “The expectations of volumes out of the total pool of 400,000 cars by (2018) are, I think, given current market conditions, not achievable.”
No, really? Actually, this is the first time that Sergio went out of his way to mention how crucial the Chinese market was to his grandiose “vision” for Alfa Romeo. Before this he was absolutely certain that consumers were just lying in the weeds to pounce on Alfa Romeos as soon as they were unloaded off the trucks at the dealers, and it didn’t matter whether it was here in the U.S. or globally, the emergence of the Alfa Romeo brand was a fait accompli as predictable as Sergio’s multi-hundred-million-dollar payday when he walks away from his current gig.
Remember, Marchionne is the guy who said that FCA would be selling 400,000 Alfa Romeos annually by 2018, even though they sold just 68,000 globally in 2014. And for that boast to include selling 75,000 Alfas here in the U.S. - even though the numbers of 4C sports cars sold here in 2014 barely even registered - was simply off the charts ridiculous, a giant bowl of “as if.”
Unfortunately far too many, including members of the media and industry analysts alike, sat back and allowed Marchionne to spew his unmitigated bullshit about Alfa Romeo as if it were gospel. I didn’t see it that way, obviously.
For me it was easy to see right through Sergio, just as it was easy to see right through his agenda and his many calculated media manipulations from the moment he landed here. And the fact that Alfa Romeo had less than a snowball’s chance in Hell of ascending to the level of Audi in a handful of years was the most absurdly transparent of all of Sergio’s grandiose fallacies.
As I said in September, I have been writing editorial commentaries about FCA’s Sergio Marchionne, the self-appointed auto CEO of the world, for years now. I even recall a previous column where I used the term “the full Sergio.” And every time I do, I get the usual array of hate emails suggesting that I am a “disgrace to my heritage,” “completely misguided and wrong,” “plainly mental” and “how do you sleep at night being the biggest asshole in the business?” etc., etc., etc. And those are just a few highlights from the nicer ones.
Yes, I have relentlessly pounded Marchionne, but he has deserved every single word of my scathing assessments of who he really is and what his true mission in life – as he sees it - is. I have kept my foot down hard on Marchionne because frankly, most everyone else in the business – you lapdogs in the media know who you are - has given the guy a free pass from the moment he showed up here, gathering at his feet like children around a campfire for story time, letting him exhale his fantasy mind clouds containing his view of the world – both real and imagined - while dutifully reporting every word as if they had just witnessed the return from the mountaintop of the New Savior of the auto business, grasping carbon fiber tablets etched with his personal musings and meanderings designed to save us all.
And we had to suffer through the pontificating, the bombast, and the endless media descriptions of his dress and his personal proclivities, including the ugly sweaters and the smoking, the 30+ direct reports (because no one else was truly bright enough to grasp everything that he does), his espresso-swilling minions and, of course, the unbridled arrogance that was never ending and all encompassing.
And Sergio’s Message? He is always right and everyone else is always wrong. So wrong, in fact, as to be laughable, especially here in the Motor City where he could hardly conceal his derision toward the “lesser lights” as he viewed them, toiling away at the other car companies.
And all the while I saw right through Marchionne - this deal-making stronzo who ultimately was only out for The Canonization of Sergio - who himself was a glorified bagman for the interests of what was left of the Fiat Empire, and who was smart enough to put his hand out at just the right moment so he could be gifted the remnants of Chrysler by the Obama administration, ending up paying $6 billion for the whole shebang when the Jeep brand and plant were worth that alone.
Marchionne and his espresso-swilling posse have had a good run. They absconded with Chrysler’s assets for a song and they rode on the backs of the True Believers out in Auburn Hills, turning their tremendous efforts on Jeeps and pickups into pure gold. But now, Brother Sergio’s Traveling Salvation Show isn’t just out of gas, it’s broke down and busted at the side of the road.
Marchionne’s Alfa Romeo ploy was an amazingly disastrous trip down the Boulevard of Broken Dreams, one that was bound to end badly. But as absurd as it was it did manage to crystallize the full measure of Sergio’s runaway ego and expose his woefully delusional mindset for all to see, so there’s that at least.
The grim reality behind Marchionne’s egomaniacal bluster never goes away. FCA is bleeding cash despite selling Jeeps and pickups hand-over-fist, and the margins are so razor thin that the whole thing is teetering on the edge of oblivion.
In Marchionne’s mind he needs a merger or a “partner” desperately, but realistically he and his espresso-swilling minions will be forced into an inglorious buyout, one not on his terms. There’s no amount of pontificating out loud to the press that is going to change that fact either.
And that’s the High-Octane Truth for this week.
(Detroit Free Press)
The light is about to go out on Marchionne’s UAW-approved shower cap, er, halo.
Editor's Note: Watch "Episode 4" of AutoextremistTV on YouTube here. -WG