Abstract
Towards the end of June 1993, Umberto Agnelli asked me to his house, in La Mandria, a large park near Turin. I saw nothing odd about such an invitation, which I had received other times, but I soon realized that it was a special occasion. Agnelli went straight to the point: “As you know” he said, “Romiti will be leaving next year; I have to prepare the succession. I have decided to bring Gabriele Galateri onto the Fiat Board, to take up the place that Professor Monti has left vacant”. In fact Mario Monti, the future European Commissioner , had recently resigned from the Board of Fiat SpA without any apparent justification, leading Gianni Agnelli to suppose that he did not want his immaculate reputation to be connected with those guilty of bribery within Fiat, an act of cowardice that had cancelled in a second the consideration with which Agnelli had gratified him until then.
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Notes
- 1.
Translator’s note: Galateri was at the time amministratore delegato of IFIL.
- 2.
Translator’s note: and later prime minister of Italy (2011).
- 3.
In fact the years were 13, not 15. On 26 November 1991, the “Financial Times” referred to that interview: “Agnelli ensures that Fiat stays a family affair”, while “The Wall Street Journal Europe” printed a sly and irreverent headline: “Agnelli Chief Says Brother Will Head Fiat? Someday”. None of Gianni Agnelli’s designations for the succession ever came about: in Fiat, gossips were in the habit of making ironic quips about the hoodoos of the presidente’s prophecies about the succession.
- 4.
Radiocor, 27 May 1993.
- 5.
I also met Cantarella and tried to persuade him to pay more attention to the bottom line of the profit and loss statement, by having him flanked by a “restructurer”. At the time I noted: “Cantarella and I have dinner, in the handsome corner room [of the company flat in Villa Cairoli] and the conversation is calm and friendly; but he is stubborn as a mule. He agrees, he tells me, to have more frequent talks with me about the troubled topics of the strategy of range product and network; but he rejects as “delegitimizing” any idea of a committee; and, above all, he is very restrictive regarding the internal organization of Fiat Auto: it would be enough for him [to have with him Roberto [Testore], a promising youngster that I would have sent to run Comau and who he considers his protégé. As usual, he favours people he knows he can control (“non-threatening”, as Auteri would say) over persons who are more incisive but harder to manage. […]. I flatter him a little calling him a “car man” and father of the Punto, which everybody thinks is beautiful and destined for great things right from the cradle. Above all I come down heavily on the situation, and I have with me the documentary proof, all papers generated by Cantarella himself: the dramatic results of ’93, which were to be even worse the following year; the debt, of 5,000 billion, as against a similar sum that had previously been in the coffers; the loss of market share outside Italy, at its historic minimum of 4.2 in August, despite the [Fiat] “Cinquecento”; the improving trend in product quality, which had been reversed, dramatically in the case of Alfa Romeo. Nobody wants to give him all the blame, but the risk for Fiat as a whole is so high that it is inconceivable to bet everything on a single man; he ought to be the one to ask to share all decisions with others; in fact, with all those who can give a hand; in fact, without anyone so much as thinking of backing out (and if the cap fits, wear it). All useless: he holds his ground, and I realize I have to fall back on strong measures; but then it would be better to have Romiti take a hand, accustomed as he is to the role of domineering father”.
- 6.
See Document 10 in Chap. 14.
- 7.
The operation included 3,234 billion lire of capital increase (two new shares as payment for every three owned), plus 194 billion for shares to employees, collectible within 1993, and 857 billion in warrants, collectible one year later; after subtracting 220 billion of intercompany, the net figure was 4,064 billion. The package was presented as 5,000 billion, because it included other financial operations, including the sale of Rinascente, which deconsolidated 865 billion in debts. But Fiat did not have financial problems because, according to the data that Guido Merlani periodically presented, the uncommitted lines of credit were utilized very partially while the committed ones had never been touched.
- 8.
This motto can be seen on the façade of the church of Gran Madre di Dio, built in Turin in 1820 to celebrate the restoration of the Savoia family after the defeat of the usurper Napoleon Bonaparte.
- 9.
At the height of the Clean Hands affair, Romiti issued a policy document on the ethical conduct of the Company, prepared by the lawyer Franzo Grande Stevens. In my opinion, the text contained many lacunae, but above all it was polarized on company top management, without giving any assurances to the operative management. I offered my comments in this sense, but did not receive so much as a reply. I thought then that the aim of the policy was merely cosmetic. The policy with which I am dealing here was another matter: it concerned the whole of company activities, of which those that represented some risk of “improper” payments were absolutely marginal.
- 10.
Except for the Alfa Romeo 33 and the big people carrier U60, the Fiat Ulisse, owing to an excessive burden of investment, but by then both had been paid off already.
- 11.
But I was still far from supposing that I had immediately lost all appeal to my boss, so on 21 December 1993 I permitted myself a risky initiative. The day before, the Comitato di Direzione Generale had been presented with (for its information, insofar as it referred to aspects not of its direct competence) a Fiat initiative to candidate itself as the number two mobile phone operator in Italy with the Consorzio Unitel (a joint-venture between Fiat and Fininvest), in competition with Omnitel, the consortium between Olivetti/Bell Atlantic and Mannesman/Sprint. I opposed the initiative which I thought was misleading and wrote a formal letter to Romiti in this sense, in which I said: “This [initiative] flies in the face of all the statements of principle that we have made, in all possible places, regarding the Group’s industrial strategy; and it strikes me as harmful from every point of view. […] [What’s more] we will look as if we want to stick our noses in everywhere in areas that are not ours and then we risk looking very bad if we lose the tender”. I received no reply and Fiat took part in the tender. As usual, Romiti missed no chance to deal with every event or venture in Italian economic policy, while he neglected cars, lorries and tractors around the world (in the hands of Sector Heads who were “not to be disturbed”). Mattioli told me that we could have made money by simply proposing ourselves for mobile phones and then getting paid for withdrawing. This struck me as a kind of blackmail unworthy of a world car manufacturer. Fiat lost, as was predictable, but Romiti endeavoured to have the tender invalidated as long as he could snatch the prize from Olivetti, which he identified with the detested Carlo De Benedetti. His attempt failed.
- 12.
In that period I was forbidden to communicate outside the firm by telephone but not in writing, and so I worked almost normally, passing on manuscripts to my efficient secretary, Anna Maria Spinazzi, who made copies of them and distributed them to the recipients.
- 13.
Translator’s note: a euphemism for the social safety net for workers made redundant: they were expected to look for a new job (mobility) but had the right to receive compensation from the state up to retirement age (long).
- 14.
Translator’s note: the semi-official newspaper of the Holy See.
- 15.
Translator’s note: the initial for ing. (ingegnere), as Mr Garuzzo was often referred to. The shortening is a sign of shyness.
- 16.
From this perspective you can understand the creation of a new, completely useless committee. On 13 January 1994 Cesare Romiti wrote to the head of Personnel, Enrico Auteri: “On Monday 24th of next January at 10 o’clock, there will be held the first meeting of the Group Committee with renewed goals and participants. I believe that in this very difficult moment it is indispensable to create a mechanism that allows us to intervene with continuity regarding the problems and, at the same time, to provide all the Function Heads of the Holding Company a constant reference point from which to follow the emergency situation we are going through”. No one felt a need for a new use of his own time in the very moment in which, after three years, we were beginning to glimpse some light at the end of the tunnel, but the periodic meeting chaired by Romiti was intended to allow him to receive the merit for the umpteenth rescue in the eyes of Gianni Agnelli, who frequently took part. Substantially the committee, formal and wary, a real “sung Mass”, served no purpose, also because I continued to hold my direct meetings with the Sectors, as always, and because the “mechanism” created “to intervene on problems” was already in existence and had continued to function in the three difficult previous years, namely the Comitato di Direzione Generale.
- 17.
The united company would have had the following dimensions: in cast iron, a turnover of 1,200 billion from 9 factories in 5 countries and 8,600 employees, of whom about 3,000 were in Italy; in aluminium, a turnover of 800 billion lire from 9 factories in 6 countries and 4,300 staff, of whom 1,500 in Italy.
- 18.
In spring of 1994, when I realized that Fiat’s results were improving, I gave my co-workers Paolo Cantarella and Giancarlo Boschetti a rise in compensation that was limited but substantial, which followed years of total abstinence, justifying it with the results recently achieved in their Sectors (all the other Sector Heads had been treated better in that lapse of time); as for me, Romiti reserved worse treatment, without giving me any explanation. His behaviour was more than unjustifiable, coarse, but while I pointed this out I had not protested.
- 19.
Translator’s note: the main opera theatre in Turin.
- 20.
Translator’s note: an attempt in 1995 by Cuccia (Mediobanca) and Romiti (Fiat) through a Fiat subsidiary to get control of a substantial part of the Italian economy in many different fields (including the Corriere della Sera publishing company, “RCS”), which failed because of public outcry and balance sheet shortcomings. Later, Fiat granted Romiti a controlling shareholding in what remained of Gemina, as a golden handshake.
- 21.
Translator’s note: the big Lingotto plant in Turin, built in the 1910s and 1920s, was transformed into a major multitask real estate complex, but Fiat did not make much profit out of it, as reported here.
- 22.
Translator’s note: in its heyday (1983), Fiat purchased the splendid Palazzo Grassi, on Venice’s Canal Grande, to hold art exhibitions. It was later sold to the French entrepreneur Pinault.
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Garuzzo, G. (2014). The Restoration of Cesare Romiti (1993–1994). In: Fiat. Springer, Cham. https://doi.org/10.1007/978-3-319-04783-6_10
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