Marchionne forcing di Montezemolo out
Luca Cordero di Montezemolo, Ferrari's longtime chief, is heading for the exit after clashing with Marchionne over strategy, according to a report in Bloomberg News citing people familiar with the situation. Di Montezemolo may leave later this year, although the timing remains unclear and there has been no agreement on a severance package. Fiat and Ferrari representatives declined to comment.
Marchionne wants to the put the Ferrari brand to work as he pushes to expand Fiat Chrysler's lineup of high-end cars. But di Montezemolo, who has run Ferrari for 23 years and began his career as an assistant to founder Enzo Ferrari, wants to maintain the company as an autonomous unit within Fiat and safeguard its exclusivity by limiting sales to about 7,000 cars a year. The newspaper Corriere della Sera says Marchionne is likely to take over Ferrari when di Montezemolo leaves.
The dispute burst into view at Italy's Formula 1 Grand Prix over the weekend, when the 67-year-old di Montezemolo sought to quell rumors he might leave Ferrari, saying he had offered to remain for another three years. A clearly irritated Marchionne responded: "Nobody is indispensable." The Fiat chief executive also described the performance of Ferrari's Formula 1 team, which hasn't had a winning season since 2008, as "unacceptable."
Marchionne wants to develop new markets for Ferrari and said earlier this year that he could envision boosting annual sales to 10,000. That number is minuscule compared to the 4.4 million cars sold by Fiat Chrysler last year. But the profit margins are enormous: Ferrari accounted for 12 percent of Fiat's operating profit. And with sticker prices ranging from about $200,000 to more than $400,000, Ferrari wants buyers to feel they are members of an exclusive club—owners of "a desirable object par excellence," as di Montezemolo has put it. His fear is that Fiat Chrysler will over-expose the brand.
Even di Montezemolo agrees that Marchionne will get his way. The longtime Ferrari chief has told friends, "It's the end of an era," according to Corriere della Serra, and that "Ferrari is now American."
Di Montezemolo is finding support among some fellow Italians who say Marchionne has reneged on promises to protect Italian jobs and give a boost to the country's economy. Italian news media outlets this week quoted Diego Della Valle, chairman of luxury leather-goods maker Tod's, as saying Marchionne's comments about the Ferrari chief were "shameful and offensive." He added: "If you are proud to be Italian, you should pay your taxes in Italy, where Italian workers of Fiat pay them." BusinessWeek