Who Is Giuseppe Morchio?
Giuseppe Morchio is an Italian business leader with a background in mechanical engineering who has held key leadership roles at the tire company Pirelli & C. S.p.A. and Fiat Automobiles S.p.A.
Morchio was the chief executive officer (CEO) of Fiat in 2004 when he abruptly resigned after being passed over for promotion to chairman of the board.
An In-Depth Look at Giuseppe Morchio
Born in Genoa, Italy, in 1947, Morchio earned a degree in mechanical engineering from the Genoa Polytechnical University. He began his career in 1974 as a cable engineer for the Manuli Group, the Italian manufacturer of rubber goods.
- Giuseppe Morchio was CEO of Pirelli, the Italian multinational tire company.
- He also served as CEO of Fiat, now Fiat Chrysler Automobiles.
- Morchio recognized and exploited the potential of cable as a conduit of information as well as power.
He joined Pirelli in 1980 and rose through the ranks to be its chief executive officer. He was chief executive officer and chairman of the board of Pirelli Tyre North America from 1992-1993 when he was recalled to Italy to head Pirelli Cavi. By 1995, he was head of its parent company, Pirelli Cavi e Sistemi.
A Pirelli Turnaround
Morchio is credited for turning Pirelli around from a money-loser to a powerhouse by leveraging the company's diverse holdings in energy transmissions and telecommunications systems. It was a timely move as the internet revolution began.
After a brief retirement in 2000, Morchio joined Fiat as its CEO. He made significant moves to pull Fiat out of debt and into profitability, but abruptly resigned in 2004 when he was passed over for promotion to chairman of the board.
Lessons from the Cable Industry
Marchio's career can be read as a lesson in the usefulness of cable. At Manuli, he learned that cable can direct the flow of information as well as power.
At Pirelli, Morchio focused on adding cable manufacturing divisions to Pirelli’s list of holdings and divisions. With the advent of the Internet in 1995, these additional holdings would swell the company's net worth by billions. The company's cash reserves swelled after the sales of portions of the cable divisions to Cisco and Corning.
These maneuvers, engineered by Morchio, raised Pirelli's stock values significantly. In 2000, Morchio cashed in $150 million in stock options and retired, saying he expected to live a life of leisure.
A Comeback at Fiat
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 2000 onward. Morchio’s mandate was to oversee the company’s operations and restructure Fiat back to profitability.
Soon after taking over, Morchio orchestrated the sale of Fiat Avio, the company’s airplane division, for $1.7 billion in order to raise capital to retool the company’s factories. He then issued a new round of stock to raise additional capital of $1 billion.
The cash stash was used to retool factories, expand Fiat's marketing and research divisions, and push innovation in its automobile brands including Ferrari, Maserati, and Alpha Romero. Morchio also put a new car into the market, the Panda.
Departure from Fiat
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. Fiat's chairman of the board, Umberto Agnelli, died suddenly of stomach cancer in 2004.
Agnellis' death left the chairman of the board post open, and the job went to Luca di Montezemolo, CEO of Ferrari.
Morchio felt the snub and resigned. Though the move rocked the company and the auto industry as a whole, Montezemolo assured the press that he planned to press on with Morchio’s plans.
Fiat, the eighth-largest automaker in the world, is now known as Fiat Chrysler Automobiles N.V.