Luca Cordero di Montezemolo, chairman of Ferrari, has resigned after leading the Italian super-car maker for 23 years, due to differences of opinion on business strategy decisions with the man leading Fiat S.p.A (OTCMKTS:FIATY), Sergio Marchionne.
Turin-based Italian automobile giant Fiat, which owns Ferrari, said in a statement Wednesday that the 67-year-old Montezemolo will resign on Oct. 13, according to a Bloomberg report. Marchionne, who has publicly expressed his disappointment over Ferrari’s performance in Formula One racing, will take charge of the super-car maker.
Marchionne reportedly said in a statement that discussions with Montezemolo over Ferrari’s future and its racing performances “led to misunderstandings which became clearly visible over the last weekend,” adding: “I want to thank Luca for all he has done for Fiat, for Ferrari and for me personally.”
Fiat owns 90 percent of Maranello-based Ferrari, which is a key asset in Marchionne’s strategy to expand the automobile manufacturer's presence in the luxury car market to help it compete with the likes of Volkswagen AG (OTCMKTS:VLKAY), which also owns Italian super-car company Lamborghini.
After the announcement, Fiat’s shares went up by 3 percent in Wednesday morning’s trading in Milan. The company's stock has gone up by 33 percent this year, bringing the value of the company to about $12.8 billion.
In 1991, Montezemolo, leading Ferrari for the first time, wanted to keep the car’s identity separate and capped sales of its cars to about 7,000 annually to maintain brand exclusivity. While serving as head of Fiat from 2004 to 2010, Montezemolo teamed up with Marchionne to salvage the company from near bankruptcy.
However, the Marchionne-led merger of Fiat with U.S.-based Chrysler Group didn’t go down well with Montezemolo and he was not appointed to the new board of the merged company, Fiat Chrysler Automobiles NV.
Montezemolo criticized the merger and reportedly told close associates that “Ferrari is now American,” and that the union was “the end of an era,” Il Corriere della Sera reported Monday.
Tensions between the two were evident last weekend, when Marchionne called the recent performance of Ferrari’s Formula One team “unacceptable,” and also countered Montezemolo’s offer to continue running the company by saying that “nobody is indispensable,” Bloomberg reported.
Montezemolo reportedly said in a statement: "It is the most wonderful company in the world and it has been an honor to have been its leader," adding: "I devoted all of my enthusiasm and commitment to it over the years. Together with my family, it was, and continues to be, the most important thing in my life."
Since taking over in 1991, Montezemolo had turned around the fortunes of Ferrari by boosting revenue 10-fold as sales of its super-cars more than tripled. In 2000, Ferrari won the Formula One championship after 21 years with driver Michael Schumacher, before winning the title again in 2008.