The new head of Fiat Chrysler (FCA) brings an engineer’s precision and a successful manager’s administrative skill to the challenge of filling Sergio Marchionne’s shoes. Marchionne, 66, died Wednesday after complications from shoulder surgery. On Saturday, as his deteriorating health became increasingly evident, the FCA board picked Mike Manley as the new CEO. Manley, 54, was born in Edenbridge, England, trained as an engineer and has a graduate degree in business administration. He joined the company in 2000. In 2011 he became part of the company’s Group Executive Council. The appointment of Manley, who in the last decade quadrupled global sales of Jeep brand models, was widely hailed. Rebecca Lindland, executive analyst at Kelley Blue Book, said Manley is a “worthy replacement at FCA, but it’s a huge job to not only fill Sergio’s shoes, but to run many brands that are facing capricious fortunes in a variety of markets,” according to The Washington Post. She also said Manley’s “masterful management of Jeep and RAM will serve him well as he moves into this huge, global role,” according to the newspaper. Labor leaders also gave a thumbs-up to Manley’s appointment. UAW Local 12 President Bruce Baumhower, whose Toledo, Ohio, members build the Jeep, praised Manley. "If we had had a say in it, we would've picked Mike Manley," Baumhower said, according to the Toledo Blade.<doc-sep>One of the first issues Mike Manley will likely have to address as Fiat Chrysler Automobiles NV’s new chief executive is a lingering problem from his old job: a slow-moving redesign of the Ram 1500 truck. Mr. Manley took the helm of the Italian-American auto maker on Saturday and is expected to make his first public remarks on Wednesday, when Fiat Chrysler reports second-quarter earnings. Manufacturing delays have hobbled the launch of the redesigned Ram 1500, FCA’s top-selling U.S. vehicle, some six months after the start of production. Sales of Ram trucks and Jeep sport-utility vehicles are critical to Fiat Chrysler, accounting for what UBS says is 80% of the company’s profit. The success of those two brands is a big part of Fiat Chrysler’s revival and likely helped vault Mr. Manley, who most recently led Jeep and Ram, into the job of CEO. He was named to the top spot after the company announced the abrupt resignation of longtime chief Sergio Marchionne, whose health deteriorated suddenly. Exor NV, Fiat Chrysler’s controlling shareholder, said Wednesday that Mr. Marchionne, who forged the company into a profit-maker by combining the once-ailing auto brands, had died. Exor, which owns 29% of FCA, on Tuesday voiced its support for the continued independence of the car maker in the wake of Mr. Marchionne’s sudden exit as CEO. Ironing out the Ram’s production issues is a near-term test for Mr. Manley, who is taking over several months ahead of a planned succession at the auto maker. His managerial style is little known outside of his role overseeing Fiat Chrysler’s two core brands. He must grapple with several changes roiling the global auto industry, such as a shift toward electric and self-driving technologies, as well as heightened tensions between the U.S. and its major trading partners over tariffs. Fiat Chrysler also has been dogged by a series of recalls and federal investigations into allegations of intentional emissions cheating and labor-law violations, both of which it has denied. Representatives for the company declined to comment on the Ram’s production until after its release of second-quarter earnings. The Ram competes against Ford Motor Co. and General Motors Co. in a highly profitable full-size pickup segment, where average selling prices have far outstripped other categories, surging nearly 35% since 2010 to more than $43,000, according to researcher J.D. Power. Fiat Chrysler has limited dealer orders on several option packages for the new truck, said John Kleintop, general manager at a Ram dealership in Slatington, Pa. The company told dealers one pricey option that allows for maximum towing capacity won’t be available until January, Mr. Kleintrop said. “The launch of this truck has been inhibited by a lot of these constraints,” he said. Those delays appear to be weighing on Fiat Chrysler’s truck sales. Ram pickup sales fell 7% this year through June, to 233,539 trucks. Sales of Ford’s F-Series pickups rose 5% to 451,138 trucks, while GM’s big pickups were up 8% at 391,948. On a conference call in April before his hospitalization, Mr. Marchionne blamed “a relatively complex set of industrial challenges” at a Detroit-area factory for the slow initial launch and said that cost the company roughly €300 million ($351 million) in first-quarter operating profit. Several analysts say those issues carried over into the second quarter, prompting some to trim quarterly profit estimates and raise questions about Fiat Chrysler’s ability to meet full-year profit targets. “FCA’s launch of the all-important new RAM 1500 remains behind plan,” Evercore said in a research note published on July 17. “Investors are already asking whether a stuttering launch puts the company’s 2018 [guidance] at risk,” the brokerage said. Those continuing issues with the new Ram are a blemish on what should be an otherwise healthy earnings report card, Barclays said. The consensus adjusted operating-profit forecast among Wall Street analysts is for €2.1 billion ($2.5 billion) in the second quarter, up from €1.6 billion the previous quarter and €1.8 billion a year ago, Evercore said. The new Ram is a big upgrade over the older version, which the company plans to continue to build throughout 2018. The latest edition features upgraded interiors such as reclining rear seats and state-of-the art infotainment options, such as a dashboard-mounted large, 12-inch touch screen display that supports both Apple CarPlay and Android Auto. “This 1500 is the most technologically advanced truck we have ever built,” Mr. Manley said in January at its Detroit auto show debut. Pickup buyers “are expecting more from their truck, raising the demand for comfort, convenience and entertainment features,” he said. Mr. Manley has said Ram plans to enter the highest end of the pickup segment with a version of the Ram designed to vie with Ford’s Raptor model, which costs upward of $75,000. —Eric Sylvers contributed to this article. Write to Chester Dawson at chester.dawson@wsj.com and Mike Colias at Mike.Colias@wsj.com<doc-sep>Jeep rides to the rescue again, as brand boss Mike Manley takes the reins of Fiat Chrysler Automobiles, following a post-op health crisis for legendary CEO Sergio Marchionne. Manley has led Jeep to an unprecedented period of success, broadening the iconic brand’s product line, adding sales and production around the world and generating profits beyond analysts’ wildest expectations. A lanky Brit with a dry wit, the 54-year-old Manley is beloved by Jeep engineers and trusted by the brand’s famously demanding customers. Leading the brand since 2009, Manley internalized Jeep’s values as it added new models and soared to record sales. Accepting a Free Press Automotive Leadership Award for Jeep’s success in 2016, Manley led a cadre of tieless Jeep designers and engineers into the banquet room with a shrug and a grin: “It’s a Jeep thing.” He added responsibility for FCA’s other money machine, Ram trucks in 2015. Global success Manley also led FCA’s Asia-Pacific business and ran the Chrysler Group’s international operations, experience that will stand him in good stead as the company looks to make up for lost time in China and other developing markets. Equally at home at a black-tie dinner or a Jeep event in rugged wilderness, Manley will have to execute the ambitious five-year business plan Marchionne laid out June 1. Fortunately, he was one of the plan’s architects. Jeep and Ram are pillars of the strategy, ensuring that Chrysler’s Auburn Hills tech center and offices will remain a linchpin of the company. Read more: FCA calls urgent meeting after Marchionne surgery Marchionne out, but Fiat Chrysler in good shape FCA targets Jeep, Ram to grow; Chrysler survives Challenges include speeding up the company’s development of advanced technologies and introducing new vehicles. Marchionne regularly canceled and delayed new models as he concentrated on eliminating a heavy debt load and feeding the brands he believed had the most potential. That worked, but left FCA far behind the competition in sales hotbeds like China, and largely absent from fast-growing market segments like city-oriented urban utility vehicles. Alfa Romeo must carry its weight Despite those delays, FCA replaced two of its most important and profitable vehicles this year. The all-new Jeep Wrangler and Ram 1500 pickup should be rolling ATMs spitting out cash to finance vehicles like the oft-delayed Jeep Wagoneer and Grand Wagoneer and a replacement for the Grand Cherokee. FCA is ahead of other automakers because Marchionne shifted production and investment away from slow-selling sedans and toward SUVs and pickups faster than other automakers, but it still lacks entries in a number of profitable segments. More daunting, the Alfa Romeo luxury brand has been all but sales-proof in the United States. Marchionne delayed new vehicles for volume brands in favor of developing sport sedans and luxury SUVs for Alfa. The resulting vehicles – the Giulia compact sport sedan and Stelvio SUV – have style and sparkling performance, but Alfa’s thin model line, low customer awareness and a history of poor quality have kept the brand from generating the cash flow Marchionne expected. Fiat Chrysler's next challenges There’s no turning back, though. FCA has bet the future on its ability to build and sell high numbers of Alfas and the pricier Maserati luxury cars and SUVs. The company is heavily invested in the brands, and its ambitious plans for new technologies like electric and self-driving cars depend on the fat profits luxury brands generate. Meanwhile, the Chrysler, Dodge and Fiat volume brands seem to have little future. Manley’s team may have to find a way to wind them down without alienating aficionados, always a tricky task for brands with a long history. Despite its surprising financial and sales success, FCA remains a small company, expected to seek alliances or mergers with other automakers. Marchionne, 66, had shoulder surgery three weeks ago in Switzerland, Italian media reported. News reports have indicated his convalescence was taking longer than expected. The dual Italian-Canadian citizen with an MBA from the University of Windsor and a career mostly in Europe, was picked to lead Fiat in 2004. The company was paired with Chrysler as the smallest of the Detroit 3 automakers emerged from bankruptcy and government bailout in 2009. Fiat completed its deal for Chrysler in 2014, and in 2017, Fiat Chrysler reported a pretax profit of $4.4 billion (3.5 billion euro). Fiat Chrysler has exceeded expectations so far, generating consistent profits and avoiding acquisition by a foreign giant, but as Manley takes over, the future looks more challenging, not less. Contact Mark Phelan: mmphelan@freepress.com or 313-222-6731. Follow him on Twitter @mark_phelan.<doc-sep>Fiat Chrysler Automobiles NV appointed a new CEO on Saturday, after the health of long-time leader Sergio Marchionne deteriorated due to complications after surgery. Mike Manley, formerly head of the Jeep and Ram brands, will take over as CEO of the Italian-American company effective immediately. "Fiat Chrysler Automobiles NV communicates with profound sorrow that during the course of this week unexpected complications arose while Mr. Marchionne was recovering from surgery and that these have worsened significantly in recent hours," the automaker said in a statement. "As a consequence, Mr. Marchionne will be unable to return to work." FCA Chairman John Elkann said in a somber statement he is "profoundly saddened to learn of Sergio’s state of health. It is a situation that was unthinkable until a few hours ago, and one that leaves us all with a real sense of injustice." Company representatives declined to go into detail about the complications Marchionne was experiencing, or exactly how serious the complications were. According to Italian media, he is hospitalized in Zurich. “The iconic reign of Sergio Marchionne is over at FCA," said Rebecca Lindland, senior analyst at Kelley Blue Book. "Mike Manley is a very worthy replacement, with his global expertise and experience running Jeep, especially the highly successful launch of the Jeep Wrangler this year. While running FCA is a wider, broader job than running Jeep and Ram, Manley has been a loyal and worthy lieutenant to Marchionne for years." Marchionne, a 66-year-old native of Chieti, Italy, had been out on medical leave for the past several weeks after surgery on his right shoulder. The automaker announced Saturday that he will not return to his roles at Fiat Chrysler or at Ferrari NV. Manley, 54, was appointed head of the Ram brand in 2015. He has also been head of Jeep brand since 2009. According to the company website, Manley was previously chief operating officer of Asia, and ran international sales and global product planning for the company. He was born in Edenbridge, Great Britain. Manley takes the helm just more than a month after Marchionne announced the automaker would lean on the Jeep and Ram brands as it aims to be the most-profitable automaker by 2022. "Mike Manley is a logical, solid choice to replace Marchionne in light of the success of Jeep and FCA’s future being dependent on the success of Jeep and other global brands," said Michelle Krebs, analyst with Kelley Blue Book. Marchionne’s health condition sped up the timeline for a succession decision at an emergency meeting Saturday in Italy. He had already announced he was planning to leave by early next year. Marchionne, known for his rumpled sweaters and nonstop work habits, is one of the longest-serving CEOs in the auto industry. He was appointed in 2004 as the fifth Fiat chief in a two-year period. He managed to return the carmaker to profit in 2005 by cutting costs, laying off workers and then looking for a partner. The company had lost more than 6 billion euros ($7.04 billion) in 2003. With the acquisition of Chrysler in 2014, completing a five-year process, he gave Fiat the global scale needed to survive. Still, as the world’s seventh-largest automaker, the company may lack the size it needs to compete in an industry being reinvented by the emergence of autonomous driving and electrification. Marchionne led a 14-year turnaround of the company. In his time as CEO, he saved both of the namesake brands from oblivion, ushered Chrysler from Chapter 11 bankruptcy, revived Alfa Romeo in the United States and is expected to slash net industrial debt to zero. Read more: Mike Manley, new FCA chief, led Jeep's rise Read more: FCA prepares for premature end of the Marchionne era Read more: Fiat Chrysler CEO Marchionne led 14-year turnaround Read more: FCA setting audacious five-year goals Read more: Electric cars not worth investment, says Marchionne Read more: Former FCA exec pleads guilty to conspiracy cover-up Marchionne said in early June while laying out the road map for the future of the company that his mission at the company was complete, and his successor would inherit a plan already in motion to make FCA the most profitable automaker in the U.S. by 2022. "The bulk of this business is producing earnings which are almost genetically predetermined," Marchionne said then, "because of decisions that have been made in the past and which are now being executed in a market where that call has been made. The reality is 80 percent of the earnings of this house in 2022 are only going to come from the four brands that we heard about today." Those plans include efforts to leverage the highly profitable Jeep and Ram brands in the U.S. and abroad with higher-margin products that fill holes in their respective portfolios. FCA plans to deploy some $52.5 billion (45 billion euros) in capital expenditure over the next five years to achieve its 2022 goals. With elimination of net industrial debt and the revenue and profit potential of a planned financial lending arm, FCA is also targeting between $10.7 billion (9.2 billion euros) and $12.1 billion (10.4 billion euros) in pre-tax earnings in 2020. That's projected to grow to a range of $15.2 billion (13 billion euros) to $18.7 billion (16 billion euros) in 2022 with profit margins between 9 percent and 11 percent. These targets arguably would have been unthinkable in the depths of bankruptcy nearly a decade ago. And the magnitude of FCA's turnaround is not lost on the 65-year-old Marchionne. Marchionne’s last public appearance was June 26, when he spoke at an event in Rome. The company said on July 5 that the CEO underwent an operation on his right shoulder and was expected to require “a short period of convalescence.” In recent months, he was preparing to slow down but wanted first to complete the five-year plan to rid the carmaker of industrial debt, making it financially stronger and able to survive the next downturn. "I am a fixer," he said. "Until something is definitively fixed, I can’t stop," he has said.<doc-sep>
Fiat Chrysler Automobiles (NYSE:FCAU) has a new CEO: In an emergency meeting on Saturday, FCA's board of directors elected longtime Jeep brand chief Mike Manley to the company's top job. Manley replaces Sergio Marchionne, who is reportedly gravely ill from complications that set in following shoulder surgery. It's a seismic change. Marchionne is an industry giant who worked something close to magic in knitting together Fiat and Chrysler to create a viable, profitable global automaker. His ill health and departure is sad news, not just for FCA and its shareholders, but for auto-industry watchers worldwide. To be blunt, Manley has huge shoes to fill. But he'll have very little time to ramp up before his first appearance in his new role: FCA will report its second-quarter earnings before the U.S. market opens on Wednesday, July 25. I expect Manley to join CFO Richard Palmer on the company's earnings call. Here's a quick look at where things stand and at what to expect when FCA reports. Who is Mike Manley? Manley is a longtime FCA executive who has led Jeep since 2009 and the Ram truck brand since 2015. British by birth, he began his career working for auto dealership groups in the U.K., joining the company then known as DaimlerChrysler when it acquired the dealership group that employed him in 2000. Manley came to the U.S. in 2003, rising quickly through Chrysler's ranks until taking over as Jeep's CEO, a position he held until this past weekend. He oversaw a period of explosive growth: Under his leadership, Jeep's global sales roughly quadrupled. What will Manley do differently? For the moment, not much. Marchionne, who had expected to retire next April, left a comprehensive business plan for the next few years (a plan that Manley had a substantial hand in crafting). I expect that at least for the near term, Manley will execute on that plan, which calls for FCA to more than double its profits over the next four years while investing heavily in electric cars and other advanced technologies. FCA's business plan was presented to investors by the management team on June 1. Marchionne closed his comments that day by answering an investor concerned about his potential successor: Can Marchionne leave a script or instruction? The answer is that there is no script or instruction. FCA is a culture of leaders and employees that were born out of adversity and who operate without sheet music. That is the only way we know. On Wednesday, Manley will step to the head of the bandstand for the first time, as FCA reports earnings. FCA earnings: what Wall Street expects Wall Street expects a good quarter. Analysts polled by Thomson Reuters expect FCA to report earnings of 0.85 euros per share, up from 0.74 euros per share in the second quarter of 2017. They expect revenue to grow about 3.8% to 28.99 billion euros from 27.93 billion euros a year ago. How FCA's sales fared FCA's U.S. sales rose 7.9% in the second quarter, paced by a gain of almost 23% for the Jeep brand. Manley's other brand, Ram, saw sales slip slightly (down 0.2%) in the quarter. Demand for pickups has remained strong in the U.S., but FCA had some supply issues due to early production snags that slowed the launch of its all-new 2019 Ram 1500 pickup. The upshot: Manley will have good news to report As I'm sure he'll note on this week's earnings call, Manley's abrupt promotion was the result of sad circumstances. But it's likely that FCA's second-quarter result will be a good one, giving Manley some positive news to report in his debut.