BBC NEWS Americas Africa Europe Middle East South Asia Asia Pacific
BBCi NEWS   SPORT   WEATHER   WORLD SERVICE   A-Z INDEX     

BBC News World Edition
 You are in: Business  
News Front Page
Africa
Americas
Asia-Pacific
Europe
Middle East
South Asia
UK
Business
E-Commerce
Economy
Market Data
Entertainment
Science/Nature
Technology
Health
-------------
Talking Point
-------------
Country Profiles
In Depth
-------------
Programmes
-------------
BBC Sport
BBC Weather
SERVICES
-------------
EDITIONS
Thursday, 4 July, 2002, 14:39 GMT 15:39 UK
Italy's 'royal family' fights for Fiat's future
Fiat Ulysse
New models have failed to revive Fiat's sales

Workers in Turin staged a general strike last week, ostensibly against government plans to reduce job protection.

But for many, Fiat was the real target.


Fiat has always been in Italy and it should always stay in Italy

Fiat worker
It is feared that the firm, which has $6bn in debts, is preparing to abandon car production altogether.

Trade unions say cutbacks already announced by Fiat could cost 12,000 jobs across the city this year alone.

"We're worried about the situation," said union leader Vicenzo Scudieri.

"What we're afraid of, is that the big Fiat factory in Turin will end up being closed."

Injured pride

That would be a bitter blow for a city which for the past century has been the capital of the Italian motor industry.

Fiat is a national icon, controlled by Italy's most powerful dynasty, the Agnellis - the closest thing the country has to a royal family.

In an increasingly desperate effort to cut its mountain of debt, Fiat has slashed jobs, replaced its chief executive, and sold part of the Ferrari sports car business - one of its crown jewels.

Ferrari car
Fiat has partly sold Ferrari

It is a sad day for a firm whose cars inspired generations of Italians, and is still Italy's most famous company.

In its heyday, the Agnelli family was said to have boasted that more foreign heads of state came to Fiat headquarters than visited the government in Rome.

To many Italians, Fiat founder Gianni Agnelli was an almost regal figure.

"He was seen as a different kind of employer," says historian Giuseppe Berta.

"He was the biggest and most powerful. He inspired great admiration but also some fear - a special form of respect and deference."

US predator circling

Since June, Fiat has cut production, sending workers home.

Last month, sales in Italy were one third lower than in the previous year.

The pressure to sell the car business may soon become irresistible.

US-based General Motors, which already owns 20% of Fiat, is waiting in the wings.

"Fiat has always been in Italy and it should always stay in Italy," said one worker outside Fiat's Mirafiore factory.

"General Motors should not take it away."

Job loss fears

At 81, Gianni Agnelli junior, the founder's grandson, is in poor health.

Giovanni Agnelli
Fiat patriarch Gianni Agnelli is battling ill health

But he is still hoping to save the 100-year-old car business.

At Turin's town hall, however, the priority is to save local jobs - not the Agnellis' business empire.

"Agnelli is convinced that Fiat still has to play a role in the car industry," said Turin's mayor Sergio Chiamparino.

"But it's time to play this role with a partner, and I think the partner is GM. That's not yet possible with a family company."

The implications of the crisis for the Italian economy are so grave that Fiat bosses have been questioned by parliament.

Group chairman Paolo Fresco, however, is blunt. If the car business cannot be turned round in the next two years, Fiat should get rid of it.

Amid Turin's faded glory, some now see a General Motors takeover as the city's best long term hope.

But losing control of such an Italian icon would be a hard blow indeed for Italy's industrial pride.


Companies

Background
See also:

27 Jun 02 | Business
21 Jun 02 | Business
10 Jun 02 | Business
20 May 02 | Business
14 May 02 | Business
08 Mar 02 | Business
Internet links:


The BBC is not responsible for the content of external internet sites

Links to more Business stories are at the foot of the page.


E-mail this story to a friend

Links to more Business stories

© BBC ^^ Back to top

News Front Page | Africa | Americas | Asia-Pacific | Europe | Middle East |
South Asia | UK | Business | Entertainment | Science/Nature |
Technology | Health | Talking Point | Country Profiles | In Depth |
Programmes