Fiat Chrysler Chairman Favors Strong Executive
Don’t underestimate John Elkann.
Elkann is the tall, curly-haired great-great-grandson of Fiat founder Giovanni Agnelli. He typically wears fine, but not flashy, dark suits along with red sweater vests.
In public, Elkann is soft-spoken and deferential. He prefers to let Sergio Marchionne — the gruff, 61-year-old cigarette-smoking CEO of Fiat and Chrysler — do most of the talking.
But at 38, Elkann is Marchionne’s boss. He has already been through more boardroom drama than many executives twice his age and holds a list of executive roles and responsibilities that would make many others shrink.
“John is an extraordinarily thoughtful leader who is wise beyond his years,” Bill Ford, executive chairman of Ford, who considers Elkann both a competitor and a friend, said in an email.
Elkann joined Fiat’s board in 1997, when he was 21, and became vice chairman in 2003 after the heir apparent, Giovanni Alberto Agnelli, died at age 33 from a rare form of stomach cancer.
“John has successfully navigated some very difficult waters during his time as chairman, particularly as Fiat was going through a number of CEOs in a short period of time, which inevitably fell on his shoulders,” Ford said.
Elkann also has the collective weight of his family’s heritage and the future of Fiat, Italy’s largest private employer, on his shoulders. In 2009, Elkann took a huge risk when he backed Marchionne’s plan to acquire a controlling stake in Chrysler — a risk that no other car company was willing to take.
In Italy, many say that Elkann and Marchionne have sold out Fiat and moved the company’s power and influence to the U.S.
Elkann doesn’t see it that way. In his view, the employees at both Fiat and Chrysler have a greater opportunity for personal growth through the combined company and the automaker now has a better shot at surviving than either had on its own.
“I think it’s an incredible opportunity for the Italian side of Fiat Chrysler Automobiles, as it is also for the American side, to be part of a much bigger organization, and an organization which is able to respect the different cultural identities,” Elkann told the Detroit Free Press. “In the last five years, it has been a big step up, and I think in the next five years an even bigger step up.”
Elkann said he believes the most effective corporate management model includes family ownership and oversight combined with a dynamic CEO.
“It’s my experience at Fiat and now Fiat Chrysler Automobiles that when there is a very strong CEO, it’s a good thing to be chairman,” Elkann said. “I think there is empirical evidence that if you look at family controlled businesses, they actually outperform in terms of results and also valuations, the broader market.”
In addition to Fiat duties, Elkann is chairman and CEO of Exor, an investment company controlled by the Agnelli family.
Exor owns 30.04 percent of Fiat; 27.12 percent of CNH Industrial; 68.5 percent of Cushman & Wakefield, the world’s largest commercial real estate company; and about 64 percent of the Juventus — Italy’s most successful professional soccer team.
On April 15, Elkann was appointed chairman of Cushman & Wakefield, giving him even more corporate duties.
Elkann shrugged off the additional responsibility that will come with that role, because, he said, “there is a very good CEO that we just hired,” referring to Edward Forst, a former co-head of Goldman Sachs’ investment management division, that took Cushman and Wakefield’s helm last December.
About a decade ago, Elkann, like Bill Ford at the same time, was the steward of a failing automaker in need of a CEO.
Just as Bill Ford recruited Alan Mulally in 2006 to run Ford, Elkann helped persuade Marchionne to restructure Fiat in 2004.
Elkann made it clear earlier this month that he wants Marchionne to remain in charge of Fiat and Chrysler as long as possible.
Marchionne, who steered Fiat through a turnaround in the middle of last decade, then led Chrysler’s renaissance after its 2009 bankruptcy, has said he plans to remain at Chrysler through 2018.
“There is no doubt that the succession is an important topic, but it’s not an actual topic,” Elkann said.
Meanwhile, Elkann said he is becoming more and more familiar with Detroit. When Elkann is in Detroit, he typically gets together with Ford to discuss running family businesses, people they jointly know and other general issues.
“There are parallels in the sense that these are family-controlled, centenarian car companies,” Elkann said. “There has been, interestingly enough, relationships for generations . my great-grandfather was friends with his great-grandfather. “My grandfather was friends with his uncle . and I have been able to establish a good relationship with him, and he has been extremely helpful.”
Ford confirms their common ground: “Given our roles and family backgrounds, we are in a unique position to relate to one another and the issues our businesses face. . While we have two different companies and family dynamics, the human issues are similar.”