Andrea Guerra loves to abuse his washing machine--and his oven, dishwasher, and refrigerator--all with a goal of testing their performance. As chief executive of Merloni Elettrodomestici, Europe's No. 3 appliance maker, Guerra is challenging the Germans and Swedes by producing top-performing machines for the $22 billion European market.
And he's got the northerners on the run. Guerra, 37, who took control of Fabriano (Italy)-based Merloni in January, 2000, has boosted its European market share from 9% to 14.5%, narrowing the gap with Electrolux and Siemens Bosch, which are neck and neck with 17%. Last year, Guerra snapped up General Electric's 50% stake in Britain's leading appliance maker, Hotpoint, and in 2000 it bought Stinol, the market leader in Russia. Profits for 2001 rose 76%, to $66 million, on revenues of $1.8 billion. First-quarter sales were up 15% despite flat markets in Europe for most products. Merloni is now market leader in Britain, Italy, and Russia, No. 3 in France, and is setting its sights on Germany. "They have turned themselves into a multinational," says Ruggiero Magnoni, vice-chairman of Lehman Brothers Europe.
A former director of marketing for Marriott Hotels in Italy, Guerra is using technology to dazzle consumers. "Our washing machine is a PC," Guerra explains, pointing out that it and other appliances are packed with sensors and software. Sensors help cut repair times by one-third because PCs hooked up to the appliance by servicemen can pinpoint problems faster. Coming next: digital dishwashers and ovens that communicate automatically with a service center when they need repair. "We're putting digital technology into our products as fast as possible," says Guerra.
The youthful Italian boss is no technical wizard by nature. After studying economics in Rome, he traveled by elephant through Nepal before launching his business career. But when it comes to competitiveness, Guerra has plenty to spare. He was European freestyle swimming champion at age 11 and is now an avid football and tennis player. "To be very competitive you have to keep things simple and fast," says Guerra. No question, this fast-mover is making the competition sweat.
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Copyright 2002, Bloomberg L.P.
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