Abstract
One day in 1982 Cesare Romiti summoned me to say that from that moment I would no longer be his direct subordinate but that I would be referring to a direttore centrale, a new role that had never existed since I joined Fiat. As well as my Components Sector, the new organizational level also controlled the other “Intermediate” Sectors and those of Tractors and Earthmoving Equipment, while the Automobile and Industrial Vehicle Sectors remained under the direct control of amministratore delegato (CEO) Cesare Romiti. I reacted badly to the news.
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Notes
- 1.
The internal terminology of the Group, a knowledge of which is essential to orient oneself in its complexity, distinguished four Terminali Sectors and three Intermedi Sectors. The first sold vehicles outside the Group and were prevalently buyers on the “market” internal to the Group: Fiat Auto, Iveco (lorries), Fiat Allis (earthmoving machinery) and Fiat Trattori. The Intermedi Sectors were prevalently suppliers of components and equipment to the Terminali and, when possible, to their external competitors: the Components Sector, Comau (which I deal with in Chap. 2), and Teksid (foundries and, until the Seventies, steel).
- 2.
In 1976, Fiat found itself landed with Telettra, a high-tech Milanese firm, very strong and active in many parts of the world in transmission by radio link, with capacities and interests also in electronic communications. I use the term “found itself” because Fiat would willingly have done without that purchase in that period. In the Sixties, around the time that the “white knight” intervention group obliged Olivetti to drop electronics, Fiat had acquired a 20 % share in Telettra, an operation the reason for which no one in my day was able to reconstruct or explain. There was a clause in that old contract whereby Floriani, the legendary founder and manager of the Company, could transfer to Fiat the remaining 80 % of the shares at a price fixed by a precise formula, if and when he wished. Just when Carlo De Benedetti and I first set foot in corso Marconi, Floriani decided that the time had come to exercise his right. The calculation of the formula with the parameters of the day gave a result favourable to him and Fiat had to pay some tens of billions of lire. The event had enriched my personal knowledge of how to do business thanks to two lessons. First, you should never sign contracts with put and call clauses whose duration extends too far into the future, your successors have the right to choose their own ordeal. Second: it is possible to establish values or variability ranges for the prices to be paid at the deadline of the contract, but uncontrolled formulas that put no limit on the sums to be paid out are dangerous.
- 3.
Translator’s note: a reference to the judicial inquiries in the ’90s (see Chap. 9).
- 4.
Civil Engineering (Impresit and Fiat Engineering) always went its own way because it was difficult to classify according to the categories of the industry, and this was to happen later in the case of Snia BPD, whose minority shareholder was Mediobanca and was closely followed by Enrico Cuccia, a privilege that gave it a special status. There was also a Financial Sector, Fidis, which was substantially an emanation of the homonymous central function, into which no one except the consecrated could stick their nose.
- 5.
I nominated Gian Alberto Saporiti as head of the Components Sector; in the Metallurgical Products sector the recently assigned head was Ruggero Ferrero, a reliable and competent engineer who had had a long career in automobile production; in the Machine Tools and Production Systems Sector (Comau) I found my old friend Sergio Rossi (see Chap. 2); the Agricultural Tractor Sector had been under the command of Giancarlo Vezzalini for many years; in the Earthmoving Machinery Sector (Fiat Allis) Marco Pittaluga had assumed, after Jacques Vandamme and Ferdinando Palazzo, the impossible responsibility that Vittorio Ghidella had turned down.
- 6.
There was a time when some maintained that manufacturers of agricultural tractors could be competitive even if they bought engines from third parties, but the development of the competitive scenario proved this theory to be untenable. Even though it is not true that a tractor is merely an engine on wheels, because in reality the entire machine is a highly complicated system, nonetheless the engine accounts for a third of the overall cost of the product and is the arbiter of overall performance, with the result that the customer sees it emblematically: the farmer of years gone by simply called his tractor “the motor”. The purchase of Perkins, which had gone unnoticed in Italy, was noted and appreciated in a period in which mergers were rare also as a consequence of rather unconventional talks: to solve a disagreement about a million dollars on the price (at early Seventies values), the two chairmen could find nothing better to do than entrust the matter to chance and, in the London taxi in which they found themselves, they tossed a coin, literally; the penny, once it had been ensured to be the original one, was conserved among the memorabilia in the company’s historical archives.
- 7.
In the past, in Europe, demand had been doctored by the incentives freely granted by governments to direct cultivators; subsequently it was to be doctored in a negative sense by incentives to cease cultivation and letting land lie fallow, the so-called “set aside”.
- 8.
In particular, Laverda was a family-run company, well managed but too small to challenge the big names in combines such as Claas and New Holland. Hesston scarcely lent itself to integration with the others. Its location in Wichita, Kansas, in the heart of a Mormon area, ensured that local parish decisions had more weight than those coming from Modena, the remote headquarters of Fiat Trattori. Above all: the American machines were hardly suited to Europe; for example European herds do not winter in the open on the great prairies grazing on enormous round bales of pressed hay and, therefore, the gigantic machines that Hesston manufactured for this purpose (round balers) were of little use in Europe. The world market was globalizing and the few big brands with international resonance (John Deere, International Case, Massey Ferguson, Ford, and Sperry New Holland) seemed destined to prevail.
- 9.
Nando Palazzo, during the brief period in which he ran Fiat Allis, decided to free that Company from a similar bondage from which it suffered, too: he gave notice to the most inefficient consortia and nominated private dealers in their place: the measure was passed because the production of earthmoving machinery for Federconsorzi was not very important, but despite this there were unpleasant repercussions.
- 10.
Translator’s note: Istituto per la Ricostruzione Industriale (IRI), established in 1933 and dissolved in 2000, was the largest corporation in Italy, fully under State control.
- 11.
Before Snia BPD came within Fiat’s orbit, there had been a complex manoeuvre around one of its subsidiaries, Simmel, based in Castelfranco Veneto. This important company (which operated in the field of heavy forging) produced tracks for earthmoving machinery, which it tried to sell to Fiat Allis, and also big, 155-mm naval artillery shells, a product that Oto Melara considered essential to its market strategy. Cesare Romiti had asked me to follow developments in this matter together with the head of Snia’s defence unit, Sirignani. But nothing was concluded and, shortly afterwards, I had abandoned my contacts to go and head the Components Sector, but I did have occasion to visit Oto Melara, accompanied by its Chairman, admiral Stefanini, who was very proud to show me the modern equipment and specialized workforce.
- 12.
The Centauro armoured car was criticized by some who thought it was too heavy, especially for the use of a big 105-mm cannon (which could not be operated in movement like the one on the tank because it was not gyroscopically stabilized). Obviously, the technical specifications of the car were defined by the Army and it may be that Oto Melara had influenced the choice of such an important weapon. Alternatively, it is possible that the Army technicians had been influenced by the war scenarios preceding the fall of the Berlin Wall. The fact remains that the Centauro is operative, I believe to the satisfaction of the military command, and that in itself is a positive thing.
- 13.
Translator’s note: Giovannino Guareschi (1908–1968) was an Italian journalist, cartoonist and humourist whose most famous creation is the priest Don Camillo.
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Garuzzo, G. (2014). A Rather Unattractive Position (1983). In: Fiat. Springer, Cham. https://doi.org/10.1007/978-3-319-04783-6_4
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