Gianni Agnelli: A troubled tycoon

Gianni Agnelli's life had all the trappings of an entertaining - if slightly implausible - airport thriller.

Gianni Agnelli

His 81 years passed in a whirl of fast cars, Hollywood starlets, family infighting, personal tragedy - and lots and lots of money. But Mr Agnelli was more than a playboy.

Taking charge at 45 of the firm his grandfather founded, he dragged Fiat out of its Mediterranean obscurity into the global big league.

Spanning the second half of the 20th century, his career mirrors the remarkable transformation of the once-agrarian Italian economy.

It also epitomises the sort of capitalism - highly political, Byzantine, wary of outsiders - that Italy is now trying to leave behind.

La dolce vita

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 car maker, was firmly in the grip of Vittorio Valletta, his grandfather's trusted lieutenant.

Managing nicely

It was only in 1966, when Mr Agnelli was in his mid-forties, that he was catapulted in to take charge of the company.

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.

Shopping frenzy

This paid off - for a while.

Indeed, during the 1970s and 1980s, it was even considered managerially prudent to use a cash cow such as a car maker to fund forays into diverse businesses.

But the legacy of that strategy is now clear.

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 football club, Chateau Margaux wines and Distacom, a Hong Kong telephone company.

Fiat's core car business, suffering from under-investment and the feeble Italian automotive market, is looking increasingly incongruous.

Getting out...

Mr Agnelli and his family have been pulling back from Fiat for years.

The car maker is now only a minor investment in the Ifi portfolio, and family members now control just 30% of its shares.

Mr Agnelli ceded management control in the late 1990s, and was wafted up to the post of honorary chairman in 1996.

But, unable fully to let go of such an iconic company, they held on long enough to see it slump close to financial ruin.

On the day Mr Agnelli died, his family were due to meet to discuss what action could halt Fiat's decline.

... too late

Mr Agnelli's failure to pull promptly out of Fiat in the 1990s will have sullied his legacy.

Mr Agnelli may have died a tycoon in a country run by a tycoon - billionaire Prime Minister Silvio Berlusconi - but he was jarringly at odds with the Italy of the 21st century.

Mr Berlusconi is a Thatcherite free-marketeer, ruthless in his assault on the cosy inefficiencies of post-war Italy.

Mr Agnelli, meanwhile, made his career snugly within the "salotto buono", the well-heeled clique of bankers, industrialists and politicians that still dominate Italian economic life.

Italy may have radically modernised 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.

Unhappy ending?

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.

In the soap opera that is the Agnelli story, yet another plot twist is just around the corner.