DEFINITION of Giuseppe Morchio
Giuseppe Morchio is an Italian automotive executive who began his career at the Manuli Group as a cable engineer before making marks at Pirelli and Fiat. At Manuli, Morchio learned the cable industry and gained experience as a manager previous to his hire to help turnaround Pirelli Tire Company. After a formal but brief retirement from Pirelli in the year 2000, Morchio joined Fiat as their CEO and made significant moves to pull Fiat out of debt and into profitability. But Morchio abruptly resigned in 2004 from Fiat when he was passed over for promotion to chairman of the board.
BREAKING DOWN Giuseppe Morchio
Morchio acquired a degree in mechanical engineering from the Genoa Polytechnical University and in 1974 began working for the Manuli Group as a cable engineer. In 1980, Morchio joined Pirelli, a tire manufacturer known for high performance tires for automobiles. Morchio’s first position there was as director of logistics for the company, but his performance as a manager soon earned him a promotion to vice president of operations for Pirelli’s tire division.
Marchio soon gained experience in the issues of manufacturing for an international company, as Pirelli’s reputation for high performance automobile tires earned it an international sales base and offices around Europe and North America. In 1989, Marchio was again promoted to CEO and chairman of the board for the company’s division in Spain, and by 1992, he was again promoted to Pirelli Tire North America as CEO and chairman.
Influence from the cable industry
At Pirelli, Marchio’s past experience with the cable industry served him well. At Manuli, he learned that cable isn’t merely a conduit for power but that it also directs the flow of information, particular in fiber optics cabling. At Pirelli, Morchio focused on adding cable manufacturing divisions to add to Pirelli’s list of holdings and divisions. By 1995 and the advent of the Internet, these additional holdings would swell the company by billions in net worth, which would soon be used in developing capital reserve after sales of portions of the cable divisions were sold to Cisco and Corning. These maneuvers engineered by Morchio raised Perelli stock values significantly, and in 2000, Morchio cashed in $150 million in stock options before retiring a month later, claiming he would travel and live a life of leisure.
But by 2003 he was back in the game as CEO of Fiat. Once a flagship of the European automobile industry, Fiat had posted significant losses from the year 2000 onward, and upon his hire, Morchio’s mandate was to oversee the company’s operations and restructure Fiat back to profitability. Soon after his hire, Morchio orchestrated the sale of Fiat Avio, the company’s airplane division, for $1.7 billion to raise capital to retool the company’s factories. Morchio’s then issued new stock to raise additional capital of $1 billion. Morchio used the new capital to retool factories, expand marketing and research divisions and push innovation into its automobile brands like Ferrari, Maserati and Alpha Romero, as well as put a new car into the market, the Panda, which was named European car of the year in 2004.
An unexpected death would change his plans to stay on at Fiat to complete a five point plan that had been envisioned by him and approved by the board when Fiat's chairman of the board Umberto Agnelli suddenly died of stomach cancer. His death left the chairman of the board post open and Morchio wanted it but it was given to Luca Cordero di Montezemolo, the CEO of Ferrari. Morchio felt the snub and almost immediately resigned, as his original agreement with Agnelli offered him the freedom he felt he needed to get the job done. Though the move rocked the company and the industry as a whole, Montezemolo assured the press that he planned to press on with Morchio’s plans and the company’s stock price rose on that news.