MILAN (Reuters Breakingviews) – Ferrari is racing to replace Chief Executive Louis Camilleri, who resigned abruptly on Thursday for personal reasons. Fiat Chrysler Automobiles’ boss Mike Manley ticks many boxes. But John Elkann, chairman of both groups, may need the British manager to smooth a merger with France’s Peugeot. Besides, leading the $42 billion maker of pricey sports cars will be as much about enhancing its bling status as the nitty gritty of engine parts.
Manley would seem to be a convenient choice. Elkann, the top investor in Fiat and Ferrari through family vehicle Exor, has already proved his confidence in him by appointing him successor to Sergio Marchionne in July 2018. Manley earned his stripes by boosting the Jeep brand and has cemented his reputation by steering Fiat through the Covid-19 crisis.
Taking the number one job at Ferrari may be tempting for Manley. After the merger with Peugeot he will play second fiddle to the French carmaker’s current boss Carlos Tavares, who is already slated to lead the combined group, to be called Stellantis. By moving Manley to Ferrari, Elkann would avoid running the risk of eventually losing him to a rival.
Manley’s car experience would help Ferrari manage key challenges such as the shift towards electric vehicles. Yet, he lacks the luxury credentials that are key to the job. Ferrari shares’ mind-boggling valuation of 45 times forward earnings rests on its cars’ status as a quintessentially Italian bling product, something Camilleri – who was also Philip Morris International chairman – understood well.
During his time as CEO, he launched new models and kept a tight control on deliveries, with the aim of propelling Ferrari’s EBITDA margins from 33% towards Hermès International-like 38%. While carmakers suffered in the pandemic, Ferrari shares have gained more than 20% this year, outperforming even the top bling peers. Camilleri’s plan for Ferrari included better exploiting its brand value through collaborations with fashion designer Giorgio Armani and Michelin chef Massimo Bottura.
Elkann has already shown he is willing to look outside the car industry. Last year he picked Davide Grasso, the former CEO of Nike-controlled sneakers brand Converse, to lead Fiat’s high-end car unit Maserati. Someone like LVMH top executive Andrea Guerra, for years at the helm of Ray-Ban maker Luxottica, would be another credible candidate. Keeping Ferrari in bling gear will take more than sheer engine power.
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