Fiat were plunged into a fresh crisis yesterday as within hours of Luca di Montezemolo, boss of the Ferrari-Maserati sportscar division, being appointed Fiat Group Chairman, Giuseppe Morchio, the Chief Executive Officer, tendered his resignation, which was duly accepted.

Luca di Montezemolo, 56, who has recently become head of the Italian employer's federation, Confindustria, is one of the rising stars of Italian Industry.

A long career with Fiat was capped when he was given the job of turning around the Ferrari sportscar arm, a task he did with style and success.

In the last decade Ferrari cemented its position as the world's number one sportscar maker with a fresh new range of hugely charismatic models, including the fearsome 660bhp 6.0-litre V12 powered F1-technology derived Enzo and the recently introduced, stylish new 2+2 612 Scaglietti 'Grand Tourer'.

The Formula One team was totally overhauled, and under the leadership of Frenchman Jean Todt, and with German driving ace Michael Schumacher in the cockpit, they have embarked on a period of utter dominance, the like of which has not been seen before. Fiat's other performance car company, Maserati, was incorporated into Ferrari and a huge investment program is underway aimed at ramping production. Successes outside the group include organizing the 1990 Football World Cup, and heading up Italy's first ever America's Cup entry.

Montezemolo's first task was to name Gianni Agnelli's 28-year-old grandson John Elkann, as Group Vice-Chairman, thus keeping the Agnelli family closely tied into the industrial giant, while Andrea Agnelli, Umberto's son, and Tiberto Ruy Brandolini d'Adda are promoted to the board.

Giuseppe Morchio was brought in by Umberto Angelli, who died of cancer last Thursday, when he was himself appointed Chairman last spring. Morchio who had previously spent 21 years as a senior executive with Pirelli, replaced Alessandro Barberis, to become the Group's fourth CEO in five months.

In tandem with Chairman Umberto Agnelli, he drove forward the Group's restructuring plan, bringing the banks on side, and freeing up fresh capital input. He also replaced a large swage of senior managers with new hand picked appointments from outside the company.

Morchio, who had been considered for the Chairman's job, issued a statement last night in which he cited the “changed conditions coming from the decisions taken today by the company’s board” as the reason for his resignation. He added that he would feel “regret at no longer having a part in the restructuring strategy”.

Meanwhile, Motezemolo has called a meeting of the board for tomorrow to elect a new CEO, and the names of Auto Division boss Herbert Demel and new Maserati chief Martin Leach are both being touted for possible moves in the reshuffle. Austrian Demel replaced Giancarlo Boschetti as head of the struggling car division last year, and has continued to implement the Italian's restructuring plan. While Fiat's original first choice for the job, the highly regarded Leach, was unable at the time to accept the position due to a non-competitive clause in his Ford contract, which has since been cancelled. Earlier this month, the former Ford CEO, took over the top job at Maserati.

With the ex-Ferrari boss a long time close Agnelli ally, now Chairman, John Elkann being promoted to his deputy, and Andrea Agnelli joining the board, the powerful family clan looks set to retain its strong grip on the board, a pleasing prospect for admirers of Fiat's car building style and tradition.

The family has manifested its continuing faith in the company by exercising its role as stockholder and rapidly naming the new Chairman. I regret that the Chief Executive Officer has decided to leave the Company.

I have called a Board of Directors’ meeting for tomorrow afternoon so that a new chief executive be appointed without delay. I have complete trust in the strong team in place at Fiat today, which is capably and diligently striving to carry out the Relaunch Plan. John Elkann, who has been working at the Group for several years, is growing quickly, just like other young people who represent the future of the company.

I am certain that for what Fiat represents in the national economy, I can count on the spirit of positive collaboration of the Italian system: from the Government to the political world, from the financial system to the labour representatives. Together we shall carry on with the heavy responsibility of continuing the work of Umberto Agnelli.