Speculation is once more mounting in the Italian media that Fiat Auto CEO Herbert Demel faces the chop after a lackluster first year in charge.

The Austrian, was only hired when Fiat's preferred candidate, Martin Leach, was unable to take up the appointment after his previous employer, Ford, activated a 'non-competitive' clause in his contract.

Dubbed the 'invisible' CEO by some of the Italian papers, Demel has made few public pronouncements, and the media has drawn the conclusion that the former Magna-Steyr boss, is somewhat out of his depth in his mission to turn round Fiat's loss-making auto division.

He has also been pushed aside somewhat since the arrival of new Fiat Group CEO Sergio Marchionne, who has taken a very much 'hands on' approach to his new job.

Marchionne, an independent board member, stepped into the CEO's role when Giuseppe Morchio resigned in the spring, unhappy with the promotion of Ferrari-Maserati boss Luca di Montezemolo to the position of Fiat Group Chairman.

Fresh from turning around the Swiss-based certification and testing group, SGS, Marchionne has plunged himself into this new challenge with vigour, taking an active interest in all areas.

With the CNH agricultural division, and the Iveco truck and bus arm, both seeing a return to the black, and Magnetti Marelli performing satisfactorily, Marchionne has increasingly taken a more active role with the loss making Fiat Auto division.

This interest has seen Demel somewhat squeezed into the margins, as Marchionne, who is regarded as having quickly gained an understanding of Fiat's core values, has built a strong relationship with senior manager's, including Luca De Meo, who has recently been promoted to the head of 'Fiat Brand & Commercial'.

Demel's proposal to phase out the Lancia brand by 2007 was quickly dismissed by Marchionne as a misjudgment, and the idea was reversed.

Lancia has in fact shown a remarkable recent resilience in the face of this grave threat to its almost century old existence, although Demel's predecessor as Fiat Auto CEO, Giancarlo Boschetti, set the ball rolling by axing all Lancia's future projects.
 

Despite all this Lancia, is performing strongly this year, spearheaded by the well received new Ypsilon, and bucking a somewhat lackluster market by recovering some of its lost market share. Marchionne envisions a future for Lancia, while he is also believed to be instrumental in the recent realignment of Alfa Romeo to focus on more affordable, sporty cars.

Meanwhile, waiting in the wings, is the former head of Ford Europe, Martin Leach, who recently was appointed boss of Ferrari's Maserati arm.

Leach was the preffered choice to succeed Giancarlo Boschetti as Fiat CEO last year, but Ford however activated a non-competitive clause in his contract, forcing Fiat to cast around for an alternative replacement. A US judge threw out Ford's case and Leach is at present suing his former employer's for damages.

As well as having been one of the most powerful men in the European automotive industry, Leach is hugely respected. His twenty four year career with Ford saw him, during a stint in the far East as Mazda's head of product planning, programmes and designs, introduce fresh, stylish and technologically up-to-date new models, before the job of reviving Ford Europe's fortunes beckoned.

Despite presiding over the biggest loss in the division's history, Ford Europe were in disarray before Leach arrived, with falling sales and shrinking margins, and the first signs were already there that his policy implementations were beginning to ease the situation, when Ford somewhat hastily pushed him aside.

Australian-born Leach's acknowledged strengths are in product development, an area that Fiat are crying out to strengthen at present. While he has thrust himself into the role of overseeing Maserati's revival, for a man of his reputation and experience, it can only be seen as a stop-gap job. His name is constantly being linked with top jobs at global automotive giants.

Unfortunately for Demel, who spent twelve years with VW prior to his stint as Magna Steyr CEO, as long as a CEO of Leach's stature is in charge of a Fiat division that builds less that four thousand cars a year, speculation is always going to link him with the top job.