OBITUARY-Fiat chairman Umberto Agnelli dies


TURIN, May 28 (Reuters) - Umberto Agnelli played second fiddle to his elder, more charismatic brother Gianni and it was only in the last year that he stepped into the spotlight to tackle the financial crisis at carmaker Fiat .

Agnelli, chairman of the industrial group, who died late on Thursday after a battle with cancer, had a mixed relationship with the firm that his grandfather founded 105 years ago.

But he leaves the legacy of pulling it into the 21st century as a public company with annual revenues of about 50 billion euros ($60 billion) rather than a family plaything.

A one-time senator for the Christian Democratic party, the silver-haired Umberto Agnelli did not have the flamboyance of Gianni, who was described as an uncrowned king of Italy due to the family's dominance of finance and politics.

Compared with his brother, who had a deep affection for the Fiat cars that came to symbolise Italy's postwar boom, the younger law graduate was a numbers man.

Chief executive of Italy's largest industrial group for 10 years in the 1970s and CEO of its Fiat Auto division throughout the 1980s, Umberto was ousted from both posts as Fiat lurched from one crisis to another.

He was denied the Fiat chairmanship twice by Gianni who was instead grooming Umberto's son for the top job before the heir-apparent died in 1997 from stomach cancer.

Umberto only took the top seat after Gianni died early in 2003, also from cancer.


By the time Umberto took the helm, Fiat was in its deepest ever crisis.

In 2002 it made a record net loss of 4.3 billion euros and was having to sack thousands of workers to get costs under control while pumping up investment in new cars to reverse a sales slump at Fiat Auto.

During the crisis, Umberto had been chairman of the Agnelli family holding company Ifil and had made no secret of his willingness to see Fiat sell its loss-making car arm and focus on more profitable service-based sectors as Ifil had done.

But once in the driving seat of the tractor-to-robots group, he pledged his allegiance to the auto division and brushed off talk of exercising a put option to sell it to U.S. giant General Motors , which now owns a 10 percent stake.

A quieter, more down-to-earth man than his brother, Umberto stamped his authority on Fiat, bringing in no-nonsense Chief Executive Giuseppe Morchio for an overhaul and allowing an army of outside managers to take over a company dominated by long-term Fiat employees.

He took on tough fights, and played hardball with GM.

GM argues that action Fiat took to re-boot Fiat Auto has annulled the put option, and the two carmakers have delayed the option until January 2005 to work out their feud.

Agnelli insisted the option has a value and he pushed for compensation if it was annulled.

Umberto was known to soccer fans as honorary chairman of Turin soccer club Juventus.



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