Gianni Agnelli leaves priceless legacy

Italy's leading magnate led life of privilege and tragedy

Gianni Agnelli's life had all the makings of a Hollywood movie, with his fast cars, movie-star girlfriends, personal tragedies and family infighting. But the business magnate, who died last week at the age of 81, was more than a libertine playboy. He was instrumental in dragging Fiat, the car company his father founded, out of its Mediterranean obscurity into the global big league.
Born in 1921 into a combination of money and power (his mother was a Bourbon princess), Gianni Agnelli seemed cut out for a life of feckless indulgence.
During his youth, he moved in a predictably raffish set, racing around the world with Prince Rainier of Monaco, and courting Hollywood divas such as Rita Hayworth and Anita Ekberg.
He fought for Italy - and fascism - on the Eastern Front in World War II, but kept well away from anything that smelled like work. The family firm, then a substantial but largely domestic carmaker, was firmly in the grip of Vittorio Valletta, his grandfather's trusted lieutenant.
It was only in 1966, when Mr. Agnelli was in his mid-forties, that he was catapulted in to take charge of the company that his grandfather founded in 1899; he became Fiat managing director in 1963 and chairman in 1966, a post he filled for 30 years.
Without experience, he nonetheless seemed to have a fingertip understanding of how the tightly managed company should proceed. He liberated his underlings from the tyranny of Mr. Valletta, encouraged experimentation with design and branding, and pushed the increasingly glamorous Fiat brand into international markets.
At the same time, he used the firm's cash to extend its reach into a labyrinth of subsidiary holdings, including newspapers, banking and insurance, even food and textiles.
This paid off - for a while. During the 1970s and 1980s, it was considered managerially prudent to use a cash cow such as a car maker to fund forays into diverse businesses.
The Agnelli family, with some 150 members involved in the business in some form, is a complicated beast, and its investments are suitably impenetrable. The spending sprees of the past 30 years have left Ifi, the main family holding company, with a huge sprawl of investments, including stakes in tour operator Club Med, Juventus soccer club, Chateau Margaux wines and Distacom, a Hong Kong telephone company.
Under his leadership, Fiat added to its car empire by buying luxury carmakers Lancia, Maserati, Alfa Romeo and Ferrari. It diversified widely into areas such as aerospace, power and telecommunications to varying degrees of success.
Agnelli's influence extended to the corridors of power in Rome where he was courted by politicians. In 1991 he was made a life senator in honour of his role in developing Italy's economy - Europe's fourth largest - and acting as an anchor at times of political turbulence.
After retiring, Agnelli remained influential as honorary chairman, resisting the sale of Fiat's car business to GM amid slumping sales and growing losses.
Gianni's younger brother Umberto has recently been tipped as a new chairman of Fiat as the family tries to keep the reins of the nation's biggest private sector employer despite the increasing influence of creditor banks and pressure from the government.
Despite its troubles, the Fiat group still accounts for nearly five percent of Italy's entire economy.
Mr. Agnelli and his family have been pulling back from Fiat for years. The carmaker is now only a minor investment in the Ifi portfolio, and family members now control just 30 percent of its shares.
On the day Mr. Agnelli died, his family were due to meet to discuss what action could halt Fiat's decline.
Agnelli made his career within the "salotto buono," the well-heeled clique of bankers, industrialists and politicians that still dominate Italian economic life.
Italy may have radically modernized its economy during - and at least partly because of - Mr. Agnelli's three decades in charge of Fiat, but the resulting cronyism is now its main handicap.
Indeed, Mr. Agnelli's career had been dogged by sadness all along. An early heir, his nephew Giovanni, died of cancer in 1997, and Edoardo, his wayward son, committed suicide three years later.
Managing the warring factions in the sprawling Agnelli clan has proved at times impossible: relations with Umberto, his younger brother and head of one of the investment holding companies, have proved especially tense.
Now, it seems possible that Mr. Agnelli will be succeeded by John Elkann, his 26-year-old grandson.
Mr. Elkann has an engineering degree, but - alarmingly young and American-raised - he seems to lack the professional and cultural background to turn around such an especially Italian company.
Agnelli had been suffering ill health and last year went to the United States for treatment for prostate cancer.

Publication Date: 2003-02-02
Story Location: http://tandemnews.com/viewstory.php?storyid=2298