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This article was written by Fred
Kapner "The Agnelli family yesterday (Sunday) chose Ferrari chief Luca Cordero di Montezemolo as chairman of Fiat, triggering the resignation of Giuseppe Morchio, chief executive. The family, acting swiftly after the death of chairman and patriarch Umberto Agnelli on Thursday, opted for a veteran ally to oversee the group rather than handing over the reins to an executive who was brought in only 16 months ago. Mr Montezemolo has been a Fiat executive for 30 years. Most recently he revived Ferrari, the sportscar unit of the Fiat group, into the country's most successful sporting icon. Last week, Mr Montezemolo became president of Confindustria, the Italian employers federation, a position an aide yesterday said he was expected to keep. Mr Morchio arrived at Fiat in February 2003 and is credited with implementing a drastic turnround plan that slashed losses in the first quarter, particularly at the Fiat Auto division. Nevertheless, much of the plan for the carmaking division had been drawn up by a previous executive, while the asset sales Mr Morchio concluded had been under way before his arrival. Fiat's creditor banks two years ago imposed assets sales to reduce gross debt of €35bn (£23.3bn) and avoid possible bankruptcy. Mr Montezemolo declined to discuss future plans or his choice for Chief Executive (today announced as Sergio Marchionne, former Lonza and SGS boss). A person familiar with him said he was not expected drastically to change Fiat's overall strategy given the need to reduce debt and cut more costs at Fiat Auto. Mr Montezemolo has been eager to boost investment in Alfa Romeo whose dealer network is underdeveloped. A tough task will be the continuation of talks with General Motors over the fate of Fiat Auto. GM acquired 20 per cent of the division in 2000 and Fiat has an option to sell the rest to GM between now and mid-2009." Luca di Montezemolo: "The sudden passing of Umberto Agnelli means that I face an unexpected task, but one that I felt I had to accept. It is an act of friendship towards Gianni, Umberto Agnelli and his family. It is also for all those who work at Fiat, the banks, the city of Torino and the Italian economic and business world. The family has shown that they still have faith in the company and has exercised its role as shareholder. It has wasted no time in selecting the new President and I am very sorry to learn that the Managing Director has decided to leave the company. I
have called a board meeting for tomorrow afternoon as I would like a
new Operations Head to be appointed immediately. I will try to keep
the Fiat team united and with dedication and work hard for we will execute
the relaunch plan. John Elkann has been part of the Group now for a
few years, as have many other younger people; these are the future of
the company. I am sure that, considering what Fiat represents for the
Italian economy, I will be able to count on the support of the Italian
system, from the government to the financial system and the unions.
Together we will continue the sterling work of Umberto Agnelli. I hope
that my colleagues, who have chosen me as their president, fully understand
the significance of my choice and my unerring commitment". Click here to return to the Ferrari Happenings page.
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