
Busy week in Rome this week. Many celebrities in town. All the bosses from the big corporates were in town for the industrialists’ meeting, and for the seismic waves emanated from it, conferences and the like.
So today at 5pm Mr Marchionne appeared magically (from Detroit? from Berlin? from some Ministero?) in steamy hot hot-house Rome, wearing his Linus-style blue jumper in an appropriately sub-zero air conditioned conference room. He sipped an espresso in religious silence at the speakers’ table in front of a couple of hundreds of eyes. I thought the moment was very Louis XIV.
Bits and pieces. He explained platforms and said that an Opel today has a 80% Fiat Punto skeleton. So the operation should make a lot of sense to the German government, if you know that I mean. (But we’ll see how that turns up over the weekend).
He also said that in the car industry top management either comes from the back – the kitchen, ie the factory - of from the glitzy front, the Geneva Car Show. But the car industry cannot look pretty and sassy in the front if it does not clean up its ugly kitchen. (For sure there were some greasy c(r)ooks at the helm, in those kitchens…)
He said that the car industry has been destroying value for too many decades. (That makes a lot of sense. If the car industry were the IT one, we would still be running Lotus 123 and playing Pac Man, with advertising on TV boasting “green figures on a black background: cool!”).
He explained the negative Net Working Capital mechanism. You get paid for the sale of the car before you pay the metal that goes in it. Sort of magic. That magic stops when you stop producing.
He said that the car industry did all sorts of monkey corporate behavior. Buy financial services. Sell them. Buy components manufacturers. Sell them. They tried all the tricks. Now it’s over. (Good auto-critique…or car-critique). Continue reading ‘Marchionne’s auto-critique’