29.05.2004 UMBERTO AGNELLI ( 1934-2004 )

Umberto Agnelli, Fiat’s third-generation chairman and leading shareholder, has died aged 69. He was tragically diagnosed with cancer, which, little more than a month ago, was believed curable. 

His death deepens the tragedy that has plagued Italy’s most treasured industrial dynasty ever since his son and heir-apparent to the Fiat empire, Giovanni Umberto, died from cancer in 1997 at the age of just 33.

Umberto took control of the company a little more than a year ago, following the slow death of his brother and legendary chairman, Giovanni Agnelli.

Following dissent among the family’s numerous relatives and a severe financial crisis which nearly toppled the ailing company, it was often speculated that the Agnelli family would sell their controlling stake in the group.

Over the past fifteen months, Umberto and his influential sister Susanna, have worked to rally family members around the industrial conglomerate, which includes companies such as Fiat Auto, Ferrari, Iveco and tractor giant CNH Global, that is their destiny. This resulted in them fully subscribing for the capital share increase, allowing them to retain their shareholding, and vitally showing the banks and creditors that the clan still firmly believed in Fiat. To fund this, other investments, including the famed Château Margaux vineyard, were disposed of. 

Losses at Fiat Auto have since been reduced and, with recent upbeat assesments, the company is expected to break even in 2005, with a strong future starting to be predicted.

The death of Umberto, who joined Fiat in 1965 after gaining a law degree at the University of Turin, leaves the company without a senior family member on its board for the first time since his grandfather founded FIAT in 1899. The only family member left on Fiat’s board is 28-year-old John Elkann, a grandson of Giovanni.

During his lifetime, Umberto, born in Lausanne, Switzerland on 1st November 1934, was always in the shadow of his older brother Giovanni, 13 years his senior. Between 1970 and 1976, Umberto was chief executive at Fiat, but was always dominated by his older brother who was the group’s chairman. 

In 1976 Umberto joined parliament as a member of the ruling Christian Democratic party, however just three years later he returned to being chief executive of Fiat Auto, only to step down again in 1980 when the group faced another crisis.

Umberto then took on the task of developing Ifil, a holding company that invested money and Fiat dividends. The main purpose of Ifil was to protect the family’s wealth, by investing in largely non-industrial groups with less recurring fortunes. Among his typical Italian passions, which included fast cars, was football, and he held the title of Honorary Chairman of Juventus, Italy's most successful soccer club.

When Giovanni retired from Fiat in 1994, Umberto had hoped to take over as chairman before Giovanni’s son, Giovanni Alberto, who was being groomed for the top job, was handed control. His wish, however, was blocked by Enrico Cuccia, the powerful chairman of investment bank Mediobanca. Mr Cuccia had designed a restructuring program for Fiat, which had latterly gone through another crisis. The restructuring program prolonged Giovanni’s stay, and he was eventually replaced by Cesare Romiti, Fiat’s chief executive and a Cuccia protege.

With the declining health of his brother, Umberto increasingly took the helm behind the scenes. By stepping into the limelight he managed to save the Fiat Auto Group and at the same time keep his family organized.  

With Fiat’s current improvement of financial health and a potential return to profitability in 2005, Umberto’s defining legacy is already coming to pass.