Umberto Agnelli
1934–2004

Former chairman, Fiat

Nationality: Italian.

Born: November 1, 1934, in Lausanne, Switzerland.

Died: May 27, 2004.

Education: University of Turin, laurea in legge, 1959.

Family: Son of Edoardo Agnelli (chairman, Fiat) and Princess Virginia Bourbon del Monte di San Faustino; married Antonella Bechi Piaggio, 1959 (divorced); married Allegra Caracciolo, 1974; children: three (first marriage, one; second marriage, two).

Career: Juventus, 1956–1961, chairman; SAI, 1959–1975, chairman; Simca Industries, 1965–1980, chairman; Fiat SpA, 1970–1976, chief executive officer; 1976–1993, vice president; 2003–2004, chairman; senator of the Italian Republic, 1976–1979; Fiat Auto, 1980–1990.

Awards: Trade Award, Ministry of International Trade and Industry, 1995; Grand Cordon of the Order of the Sacred Treasure, Japan, 1996; Grand'Ufficiale al Merito, Republic of Italy; Officier, Légion d'Honneur, France; honorary chairman, Juventus football team, 1994.

■ Throughout his life Umberto Agnelli, "the Doctor," was overshadowed by the flamboyant management and social style of his older brother Giovanni Agnelli, "the Lawyer." In the words of Cesare Romiti, the former managing director of Fiat, Agnelli "lived a nightmare of being number two. You always said 'Umberto, the brother of Giovanni'" (Hooper, "Umberto Agnelli," May 29, 2004). Yet Umberto may have been the more successful businessman of the two. In only one year as chairman of the Italian car giant Fiat, a position he had been repeatedly denied, Agnelli halved the losses and reestablished the credibility of the group for customers, creditors, and shareholders.

EARLY SUCCESSES

After a childhood marked by the deaths of both his parents, Agnelli became president of the Juventus football club at only

22 years of age, starting an enduring association with the team that would last until his death. Under Agnelli's chairmanship, the team hired important foreign players for then record sums and won four championships. The year of his graduation from law school Agnelli was thrown into the world of business and took charge of the small insurance company SAI, which at the time did business only with Fiat. During the 16 years of his presidency, Agnelli transformed the firm into one of the largest Italian insurance groups, relinquishing a centralized type of organization in favor of a segmented structure. In 1965 Agnelli was appointed chairman of the former French branch of Fiat, Simca Industries, and of Piaggio, one of the most important Italian producers of scooters. With these responsibilities, Agnelli seemed destined to become his brother's successor as leader of Fiat.

ITALIAN SENATOR AND CHAIRMAN OF THE AUTOMOBILE DIVISION OF FIAT

Despite early successes Agnelli in 1976 suddenly stepped down from all industrial positions to run for election as an independent senator on the centrist list of the Christian Democrats, Italy's ruling party at the time. Agnelli wanted to represent a constituency near his hometown of Turin, yet he was forced to accept one in Rome. Agnelli won the election but served an undistinguished three-year term. His political experience was shadowed by a scandal in which the Agnelli Foundation donated funds to the right-wing faction of the Christian Democrats, Europa 70, which had totalitarian plans.

When the parliament was prematurely dissolved in 1979, Agnelli did not seek re-election and returned to Fiat as chief executive officer and later chairman of the company's core automotive sector. In the summer of 1980 Fiat faced a severe crisis due to competition from German and Japanese companies such as Volkswagen and Toyota, which produced cars that were more reliable and durable than the vehicles produced by Fiat. Agnelli resigned his position as chief executive and was replaced by Romiti. Besieged by foreign competition, massive trade union strikes, and left-wing terrorism, Fiat was near collapse. Agnelli was convinced that Fiat could be saved only through drastic cuts in the number of employees. His plans were implemented by Romiti, who was credited for breaking the trade union front with a surprising march of 40,000 white-collar employees who supported the firm's layoff measures.

EXILED FROM FIAT

During the 1980s Agnelli devoted his energies to building the family holding firm Ifil, which, under his leadership, increased its profits from ITL 30 billion to ITL 350 billion. The purpose of the firm was to invest the family earnings in nonindustrial groups whose financial prosperity would be more stable than Fiat's and thus provide better protection of the family's wealth. Meanwhile, the crisis in the automobile sector had been countered with a policy of expansion. Fiat bought Alfa Romeo and Maserati and began to invest in developing countries. However, another economic crisis hit Fiat in 1993, and the group was forced to ask for the help of the investment bank Mediobanca, which was led by the powerful Enrico Cuccia. Cuccia's restructuring of Fiat prevented Agnelli once again from becoming the chief executive at Fiat. Mediobanca offered its help but demanded that Giovanni Agnelli and Romiti extend their terms. Thinking of his retirement, Giovanni Agnelli for the second time denied Umberto the top position, designating as his successor Umberto's elder son Giovanni Alberto Agnelli. When Romiti retired as managing director, Paolo Fresco, a manager not related to the Agnelli family, replaced him. Umberto Agnelli accepted all these decisions with his distinctive discreet style, shunning the attention of the public and the news media.

PATRIARCH AT LAST

When Giovanni Agnelli died in 2003, Umberto finally became the chairman of Fiat, Giovanni Alberto having died in 1997 of a rare form of stomach cancer. Despite a partnership with American General Motors signed in 2000, Agnelli inherited a huge debt of EUR 4.3 billion and falling stock prices. Surprising everyone, Agnelli decided not to sell the car sector but to rely on it for the group's relaunch. Replacing Fresco with Giuseppe Morchio and divesting small parts of the family's other firms, Agnelli obtained the banks' trust and was able to obtain a considerable loan, which helped to push Fiat out of the financial quagmire. Although his plans were cut short by his death of lymphatic cancer in May 2004, Agnelli managed to reduce Fiat's losses considerably and presided over the inauguration of successful new car models such as the Panda, the Idea, and the Trepiùno.

See also entry on Fiat SpA in International Directory of Company Histories.

sources for further information

Chapman, Giles, "Umberto Agnelli: Urbane Chairman of Fiat," The Independent, May 29, 2004, http://news.independent.co.uk/people/obituaries/story.jsp?story=525972.

Hooper, John, "Umberto Agnelli," Guardian, May 29, 2004.

"Obituary: Umberto Agnelli," Financial Times, May 29, 2004.

Tropea, Salvatore, "Al servizio di azienda e famiglia e solo un anno da patriarca," La Repubblica, May 29, 2004.

Volpato, Giuseppe, "Corporate Governance at Fiat SpA," http://www.insead.fr/cgep/Research/Industrystudies/CGFiat.pdf.

—Luca Prono