By Peter M. De Lorenzo
Detroit. After the Sturm und Drang of last week, with VW chairman Ferdinand Piech deciding to take his ball and go home when the other kids grew weary of his egomaniacal tantrums and bullying tactics, what could possibly top that this week? Not much.
Love him or hate him, Piech was one of the most influential figures in the automobile industry. Not that he is disappearing from the scene by any means. He still is a towering figure who can manipulate the fortunes of VW for many years to come through Porsche SE, the holding company through which Piech and his cousin, Wolfgang Porsche – and their families - controls almost 51 percent of VW’s ordinary stock shares.
With Piech fading from the scene, however, the days of gigantic figures romping, stomping and chewing their way through the automotive scenery with equal parts bluster and bravado - leaving terrorized underlings and yes, even some noteworthy achievements in their wake – are over. In fact, it truly marks the end of an era when big, singular egos could carry auto companies by the sheer force of their wills.
And when I say “end of an era” I mean it, because the modern corporate environment eschews big personalities and massive egos in favor of manicured political correctness beholden to the whims of shareholders and subject to the pitchfork-wielding Internet hordes and Wall Street swells capable of rising up at any moment to cause grave company distress.
Yes, there are glints of personality and attitude out there spread among the car companies’ True Believers, but today most CEOs are on such a painfully short leash that it’s rare when they let their guard down, let alone go off of the reservation completely, like the maniacal executives of the past used to do on a somewhat regular basis.
And that’s just sad when it comes right down to it. Is this what this business has come down to, really? Robot CEOs with robot PR minions in tow walking a tightrope of political correctness out of fear of actually having something of substance to say that may resonate for a minute or two?
Yes, I’m afraid so, with very few notable exceptions.
I know some of you out there might be wondering to yourselves, well, “what about Sergio?” But anyone who thinks that the Almighty Sergio will now readily assume that mantle is dreaming. Marchionne is a gilded patrician and a manipulative dealmaker to whom the words “greatness” and “enduring legacy” will never be ascribed.
Why? Because carpetbagging opportunists never create enduring legacies, they’re glorified parasites who inject themselves into situations and then drain what they need out of them before they move on. Name the pivotal products Sergio has been responsible for creating? Not at the helm of the company when they were created mind you, but actually responsible for creating?
This just in: There aren’t any.
Marchionne is a certified genius at manipulating other people’s money to his advantage. A noteworthy skill to be sure, but not the stuff of legends or enduring automotive legacies the likes of a Piech, Porsche, Ferrari or a Henry Ford.
The Fiat Empire – or what was left of it – needed a savior, and Marchionne fit the bill perfectly, and if that family wants to keep throwing money at him – estimates of Sergio’s pay for 2014 is $125 million and counting – they are entitled to do anything they want, including erecting statues in his honor all over Italy, because without him they would be nowhere, if not altogether dead. But still, being gifted at financial manipulation doesn’t impart legendary automotive status on the Canadian-Italian. Not even close, in fact.
And tomorrow, Marchionne is promising to shed light on his ever changing plans for world domination with the release of the latest FCA financial results. What does that mean, exactly?
Well, he has been dropping huge hints left and right that he’s looking for an automotive partner, because it’s his vision that the world will be comprised of five huge automotive conglomerates eventually, and he wants that vision validated – and soon.
And other automotive entities, remarkably enough, aren’t all that interested. Why? Because it’s not really Sergio’s “vision” in play here, it’s the fact that FCA is on seriously shaky financial ground. Yes, Fiat – the little engine that could – swallowed up the assets of Chrysler whole thanks to the largesse of the U.S. Government and some impeccable timing. And they were able to ride the rebounding wave of the American economy to new heights thanks to the True Believers out in Auburn Hills who actually knew what they were doing when it came to building some excellent, desirable products.
But there’s big trouble looming for Sergio and his espresso-swilling minions right now, because despite setting gaudy month-over-month sales records by pushing out Jeeps and Ram pickup trucks at a prodigious rate, the bottom line is that the company is not making enough money and it’s carrying around a huge pile of debt. And Sergio, more than anybody, knows that it just isn’t sustainable. He has even resorted to squeezing his dealers’ profit margins, that’s how dire the situation is (and judging from what I’ve heard from some of them, they are absolutely furious about it too).
No, Sergio’s grand vision ain’t all that grand upon closer inspection. He engineered the purchase of Chrysler from the Washington bureaucrats for around $6 billion – all in – which is about what the Jeep brand was worth by itself. Now, he’s dangling the Jeep brand and his Ram pickup trucks to other car companies as the Golden Provolone that would ensure their future salvation together and, oh by the way, cement his legacy in perpetuity, at least by his estimation anyway.
The next 24 months will ultimately determine Sergio’s – and FCA’s – fate. FCA will either be absorbed into another company, or it will be left twisting in the wind.
A giant “we’ll see” as we like to say around here.
And that’s the High-Octane Truth for this week.