I like Sergio Marchionne’s attitude to Chrysler, the troubled US car company in which Fiat plans to take a 35 per cent stake in exchange for helping it to make small cars.
Most chief executives who form joint ventures such as this have extravagant promises for how they will transform the prospects of the company with which they are linking up. No so the boss of Fiat.
Mr Marchionne was quoted in the Wall Street Journal this morning describing Fiat’s stake in Chrysler as “a lottery ticket” that would only be worth something if the US company eventually turns itself around.
He was even more low-key (verging on insulting) in the New York Times:
“But the bigger issue is, What does it look like two or three years from now? It’s not as if Fiat is going to show up and Cinderella is going to be magically turned into something else.”
Of course, Mr Marchionne is telling the truth. Equity in Chrysler is pretty much worthless at the moment. Cerberus Capital Management, which owns it, was willing to give away a large chunk of the company to finance vehicle development.
On the other hand, most chief executives shy from telling it like it is, particularly when the prospects of a business venture are so modest. I think Mr Marchionne deserves credit for that.
By the way, it remains shocking that one of the biggest US car companies was unable to produce small cars by itself because its past capital investment programmes had been skewed so heavily towards vans and trucks.
