Italian carmaker Fiat, still mourning the death of the last senior member of its founding Agnelli family, was plunged into turmoil on Sunday when its CEO suddenly quit moments after a new chairman was named.
The Agnellis, who control Fiat with a 30 percent stake, moved quickly after Umberto Agnelli died of cancer on Thursday, handing the top job at Italy's biggest industrial group to the head of its sportscar unit Ferrari, Luca di Montezemolo.
Chief executive Giuseppe Morchio, generally respected by investors for his plan to pull Fiat out of its worst crisis, said in a statement that he would leave the company immediately in protest at the board changes.
Sources in Fiat's hometown of Turin said Morchio and Montezemolo were both forceful characters who may have clashed. Agnelli had given Morchio a free rein to whip the family company back into shape when he was hired last year.
Fiat said its board would choose a new CEO today but the shock resignation, the day after Umberto Agnelli was buried, means a totally new team will now take over delicate discussions with creditor banks and partner General Motors.
Promoting Montezemolo, one of Italy's most prominent businessmen, to the chairman's seat from Ferrari was a sign that the Agnellis are still committed to the carmaker their ancestor founded 105 years ago but which has slumped into crisis in recent years.
Three younger Agnellis were named to the board. John Elkann, the 28-year-old heir of Fiat's flamboyant patriarch Gianni Agnelli who died last year, will be vice chairman.
Umberto's son Andrea Agnelli and another cousin will take board seats.
Morchio's four-year turnaround plan for Fiat, drawn up with Umberto Agnelli, is starting to bear fruit but a lot still remains to be done at the tractors-to-power generation group.
Morchio had replaced about half of Fiat's top managers with hand-picked outsiders who worked in a close-knit team to breathe new life into Fiat without being too tied to its past.
Alongside Agnelli, Morchio was a tough bargainer with GM, which owns 10 percent of Fiat Auto and is in a legal battle with Fiat about whether it can be forced to buy the rest.
GM had no immediate comment about Sunday's upheaval at Fiat.
Morchio was also a key point man with banks, which could convert a 3 billion-euro loan into about a quarter of Fiat's shares next year if the money is not repaid.
Montezemolo, 56, has the charisma and business sense to step into those shoes.
A charismatic manager with strong political connections, he is credited with pulling Ferrari out of the doldrums and turning it into a sporting and financial champion.
He was also chosen to head Italy's influential employers' body earlier this year.
"The man who made Ferrari into Fiat's best-known brand is a guarantee for the future of Italian carmaking," said Luigi Angeletti, the head of one of Italy's three main unions, UIL.
"Montezemolo's appointment shows the top shareholders are 100 percent committed to Fiat's recovery," he was quoted as telling ANSA news agency.
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