The story of how Chrysler and Fiat found each other is an interesting one, since it’s not often that two weak companies can combine to create a single stronger one. And whatever shortfall there might have been in the expected sales of the Fiat 500 through Chrysler outlets in the U.S. last year, there’s no question that these two companies are the ones at which all the carmakers are looking, largely because Fiat and Chrysler are in a position where they must take chances, and that’s always instructive.
If you’re looking for greater insight into how this came about, you could dive into Jennifer Clark’s Mondo Agnelli: Fiat, Chrysler, and the Power of a Dynasty . It’s a terrific story, far more like a novel than the withered business tome you might expect. In fact, it’s a great story about the way the car business has changed over the last century and all the stuff that goes into playing the game.
Clark’s key insight is the way a business that is essentially family-owned like Fiat has the ability to react quickly in the way a typical Wall Street-style publically owned company cannot, and the way even the new entity’s leadership by Sergio Marchionne expresses these values, as the following excerpts suggest:
“Families and businesses are very different by nature,” [Agnelli heir John Elkann] said in a speech in Chicago at the Family Business Network’s annual summit in 2010. “The value of a family is about being equal and helping one another. Instead, a business is about performance and hierarchy. These two worlds operate and function differently. The lesson is ultimately when a family and a business function, they function together. You have to have a family that works, and a business that works.”
“Risk was something Marchionne knew well. He had first learned about it playing poker with his father back in Canada. It gave him an adrenaline rush. The most important thing about risk, though, was the calculation. The rush itself could be distracting or destructive. Much more interesting was weighing out all the aspects, and trying to stay calm. The cards. The moves. The consequences. Work it all out ahead of time, and then see if you were right or wrong. And in the business world, it was more or less the same thing, he had learned. Only this time it was impossible to stay detached from the risk and its consequences.”
Clark’s experience long ago as an entertainment reporter gives her great appreciation for the social details of her story, while her most recent experience with the Wall Street Journal helps her cut through the jargon of business. In the end, there’s a strong story in the way Fiat changed from a company founded by a cavalry officer with royal connections to an innovative industrial enterprise led by a man who always wears a sweater, not a suit, and the way in which this spirit has revitalized Chrysler.
Michael Jordan, Executive Editor, Edmunds.com @ 11,598 miles
jasond52 says:
12:39 PM, 01/25/12
Fiat and Chrysler remind me of Lucas and British Leyland.
33stradale says:
05:52 AM, 01/26/12
jasond52: Considering that the revitalization of Chrysler was one of the major automotive stories of 2011, I'm confused by your Lucas/British Leyland analogy. Perhaps you would care to elaborate? I didn't think so...