This story on the turnaround of the Italian car company Fiat was the cover story in Fortune Magazine. It’s archived below.
May 8, 2007
Behind the turn around at Fiat
Yes, a car company can be fixed. Look at Fiat.
By Stephan Faris
Luca De Meo, head of the Fiat car brand, was given his job after just one interview. It was a hot Turin summer day in 2004, and Sergio Marchionne, the new CEO of the Fiat Group, was prowling the company’s holiday-drained halls. “In Italy the CEO of the Fiat Group is a kind of mythical personage, somewhere between Pope and Prime Minister,” says De Meo, 39. “He knocked on the door and said, ‘What do you do?'”
Fiat was a wreck – it would lose more than $1 billion that year – and Marchionne, just arrived from Switzerland’s SGS, the world’s largest goods-inspection company, was looking for a team to strip it clean and hammer it into shape. De Meo was in charge of the group’s Lancia brand at the time, and during the two hours they talked, he felt as if he were being X-rayed. “Marchionne has a real ability to read people’s psychology,” says De Meo. “Three months later he said, ‘You have to run Fiat.'”