The white smoke appears and Fiat has an heir

A dashing 31-year-old has emerged as the likely successor to Italy's grand old man

ANDREW GUMBEL

Rome

Standing in line to take over the chairmanship of Fiat from Gianni Agnelli can be an uncertain business. In 1993, Gianni's younger brother Umberto was all set to take over the reins of power at Italy's biggest private company.

But then recession, the worst losses in the company's history and a slew of corruption scandals all hit at the same time, and Umberto was sidelined as his brother stayed on to steer the company out of trouble.

Two years on, a new heir-apparent has emerged - Umberto's dashing son Giovanni Alberto - but this time the path to the succession of the Fiat dynasty seems far more assured. The young man, nicknamed Giovannino to distin guish him from his uncle, shows the kind of promise and managerial flair that the family once despaired of ever finding again within its own ranks.

Educated in the US, Giovannino has spent the past six years rising through the ranks of the motor scooter company Piaggio, which belongs to his mother's family, and helped to pull it out of decline. In addition, he has been on the Fiat board for the past two years and appears to have dispelled any concerns about the tenderness of his 31 years.

Furthermore, the next couple of years look like a rosy time for a new Fiat chairman to ease himself into the pressures of the job. The company has enjoyed a near-miraculous turnaround since the doldrums of 1993, largely thanks to the runaway success of the compact Fiat Punto, the 1995 European Car of the Year, whose production figures edged over the million mark a few weeks ago.

After a loss of nearly 1,800bn lire in 1993, the company restructured heavily and sucked in billions of lire in new capital. As a result, 1994 saw a profit of just over L1,000bn and the figure for 1995 is expected to be at least double that.

Fiat aims to introduce new model ranges every six years, considerably faster than the 8-10 years of a decade ago, and it already has several projects in the pipeline. Two new cars, the Bravo and the Brava, are set to hit the market next month to replace the old family-sized Tipo.

Furthermore, the company is expanding rapidly overseas, notably in Brazil, and hopes to have a "world car" on the market in Argentina, India and elsewhere in due course.

Little wonder, then, if the 74-year-old chairman chose this auspicious moment to designate his successor. The passing of the baton may not happen for some time, since Gianni has promised to stay on at least until 1996 and Giovannino has indicated that his loyalties remain with Piaggio for the moment.

The delay will give the young man the chance to contemplate the enormity of the job that awaits him. Gianni Agnelli is not just a successful industrialist, he is a near-mythical figurehead whose products are found in every Italian household and whose every pronouncement on politics or economics is followed with rare avidity.

In many ways, the transfer will be less like a business appointment than a royal succession; indeed, to the Italian media, the Agnellis are no clan of executives in grey suits but a suave, jet-setting and eminently well-connected family as glamorous and established as the Grimaldis or Windsors.

The extent of the industrial muscle is quite remarkable. The family not only produces cars, but has interests in banking, insurance, armaments, textiles, food and any number of other sectors. Many of the holdings are as symbolic as they are profitable: Gianni controls not one but two national newspapers, La Stampa and Corriere della Sera; he has shares in both the leading Italian mineral water company, Ferrarelle, and its chief foreign competitor, Perrier; and of course his presence looms large over one of the country's most successful football teams, Juventus of Turin.

The question arises, of course, whether it is tenable to keep so large an industrial base the private preserve of one family and its friends. Once he reaches the top spot, Giovannino will have to decide if he wants to maintain Fiat's near-feudal power structure or bring it into line with the rest of the modern industrial world.

"I believe the age of the family firm is over," his father Umberto said recently. "Today the generation of myself and my brother can still maintain discipline amongst all the family members. But I think that one day someone will want to break free. A hard core of family shareholders will remain, but anyone who wants to sell out will have to be allowed to do so."