'Fiat S.p.A.', is an
Italian automobile manufacturer,
engine manufacturer,
financial and
industrial group based in
Turin,
Northern Italy. Founded in 1899 by a group of investors including
Giovanni Agnelli, the company name ''FIAT'' is an
acronym for ''Fabbrica Italiana Automobili Torino'' (Italian Automobile Factory of Turin), and it also means "let there be" in
Latin. Fiat was also an
aircraft manufacturer at one time.
Fiat branded cars are constructed all around the world; in
Italy,
Poland,
Brazil and
Argentina. Joint Venture productions in
France,
Turkey,
Egypt (with the state owned
Nasr car company),
South Africa,
India and
China.
Agnelli's grandson
Gianni Agnelli was Fiat chairman from 1966 until his death on
January 24,
2003. However, from 1996, he only served as an "honorary" chairman, while the chairman was Cesare Romiti. After their removal,
Paolo Fresco served as chairman and
Paolo Cantarella as CEO.
Umberto Agnelli then took over as chairman from 2002 to 2004. After Umberto Agnelli's death on
May 28,
2004,
Luca Cordero di Montezemolo was named chairman, but Agnelli heir
John Elkann became vice chairman at age 28 and other family members are on the board. At this point,
CEO Giuseppe Morchio immediately offered his resignation.
Sergio Marchionne was named to replace him on
June 1,
2004.
Activities
FIAT Group Revenues by Industry in 2004
The group's activities were initially focused on the industrial production of cars, industrial and agricultural vehicles. Over time it has diversified into many other fields, and the group now has activities in a wide range of sectors in industry and financial services. It is Italy's largest industrial concern. It also has significant worldwide operations, operating in 61 countries with 1,063 companies that employ over 223,000 people, 111,000 of whom are outside Italy.
Automobiles
See list for Fiat branded cars:
List of Fiat models since 1899
Fiat Group is the largest automobile manufacturer in Italy, with a range of cars including the Fiat
Panda,
Punto,
Stilo,
Idea,
Croma,
Ulysse and
Doblò. Car companies are run by Fiat Group Automobiles S.p.A,
Ferrari S.p.A. and
Maserati S.p.A.. Today automobile group runs well known firms like
Lancia Automobiles S.p.A,
Alfa Romeo Automobiles S.p.A,
Abarth & C. S.p.A., Fiat Automobiles S.p.A,
IVECO S.p.A., and
Maserati S.p.A..
Ferrari S.p.A. is owned by the Fiat Group, but is run autonomously. Light automobile sales accounted for 46.8% of total revenues during fiscal 2004 (3.2% of which is from Ferrari).
2
The Fiat Automobiles logo
Fiat Grande Punto
The
European Car of the Year award, Europe's premier automotive
trophy for the past 40 years, has been awarded eleven times to the Fiat Group, more than any other manufacturer.
★ 1967:
Fiat 124
★ 1970:
Fiat 128
★ 1972:
Fiat 127
★ 1980:
Lancia Delta
★ 1984:
Fiat Uno
★ 1989:
Fiat Tipo
★ 1995:
Fiat Punto
★ 1996:
Fiat Bravo/Brava
★ 1998:
Alfa Romeo 156
★ 2001:
Alfa Romeo 147
★ 2004:
Fiat Panda
Agricultural and construction equipment
Fiat Group owns
CNH Global (which includes Case Construction, Case IH, Flexi-Coil, Kobelco, New Holland, New Holland Construction, and Steyr); and Fiat-
Hitachi Construction. CNH is the second largest agricultural equipment manufacturer in the world after
Deere & Company. It is also the third largest producer of construction equipment after
Caterpillar Inc. and
Komatsu. CNH accounts for 20.9% of revenues.
3 CNH is the most prized company inside Fiat because it has driven growth and is very profitable. It also shows great promise for growth in third-world markets.
4
The new Fiat Professional logo
Commercial vehicles
Commercial vehicles (
Iveco and
Seddon Atkinson), buses (
Iveco and
Irisbus) and firefighting vehicles (Camiva,
Iveco and
Magirus). For information on their military vehicles, see
Ariete.
On 17 April 2007 "Fiat Veicoli Commerciali" was rebranded as "
Fiat Professional"
22.
Some of Fiat's Light Commercial Vehicle products include;
Fiat Ducato,
Fiat Scudo and
Fiat Doblò Cargo. See
Fiat Professional for more details on Fiat's Light Commercial Vehicle Products.
Motorcycles and aeronautics
In
1959,
Piaggio came under the control of the Agnelli family. Resultantly, as the wider ownership of Fiat in Italian industry, in the
1964 the two divisions (aeronautical and motorcycle) split to become two independent companies; the aeronautical division was named IAM Rinaldo Piaggio. Today the airplane-company Piaggio Aero is controlled by the family of Piero Ferrari, who also still holds 10% of the carmaker
Ferrari.
Vespa thrived, until
1992 when Giovanni Alberto Agnelli became CEO - but Agnelli was already suffering from cancer, and died in
1997. In
1999,
Morgan Grenfell Private Equity acquired Piaggio
Fiat itself was an important aircraft manufacturer, focused mainly on military aviation. After the
World War I, Fiat consolidated several Italian small aircraft manufacturers, like
Pomilio and
Ansaldo. Most famous were Fiat biplane
fighter aircraft of the 1930s,
Fiat CR.32 and
Fiat CR.42. Other notable designs were fighters
CR.20,
G.50,
G.55 and a bomber
Fiat BR.20. In 1950s it designed
G.91 light ground attack plane. Then, in
1969 an aerospace division of Fiat merged with
Aerfer to create
Aeritalia.
Components
The major Italian component maker
Magneti Marelli is owned by Fiat, and in turn owns the other brands Carello, Automotive Lighting, Siem, Cofap, Jaeger,
Solex, Veglia Borletti, Vitaloni and
Weber; other accessory brands include Riv-Skf and Brazilian Cofap.
Metallurgical products
Fiat owns a metal company,
Teksid.
Production systems
Production systems are made mainly through
Comau S.p.A. (now Comau Systems), which bought the American Pico, Renault Automation and Sciaky and produces industrial automation systems. In the 1970s and 1980s, the company became a pioneer in the use of industrial robotics for the assembly of motor vehicles. Fiat assembly plants are among the most automated and advanced in the world.
Services
An important insurance company, Toro Assicurazioni, allows Fiat to control a relevant part of this market (also with minor companies like Lloyd Italico, Augusta Assicurazioni) and to interact with some associated banks. Toro Assicurazioni was acquired by the giant insurance company Assicurazioni Generali and now isn't related to the Fiat Group anymore.
Construction
Ingest Facility and Fiat Engineering work in various fields of construction, while IPI is a mediation company that also deals with the management of real estate properties.
Information technology
Fiat Group is present in IT fields and in communications with ICT - Information & Communication Technology, Espin, Global Value, TeleClient, and Atlanet.
Leisure
The group owns the
Sestriere skiing facilities (being this village on
Alps a creation of Agnelli family). The
Sestriere skiing facilities has been sold by the group in 2006.
Publishing and communication
Fiat group also owns important editorial brands, like
La Stampa (created in
1926 for the famous newspaper), Itedi, and Italiana Edizioni. Some national and local newspapers are owned or otherwise controlled by the different companies. A specialised advertising space reseller is Publikompass, supported by the Consorzio Fiat Media Center.
Other activities
Fiat Gesco, KeyG Consulting, Sadi Customs Services, Easy Drive, RM Risk Management and Servizio Titoli are minor companies that work for public services, delivering services in economics and financial fields. Other activities include industrial securitisation (Consorzio Sirio), treasury (Fiat Geva), Fiat Information & Communication Services.
Fiat supports the ''Fondazione Giovanni Agnelli'', an important foundation for social and economic research.
Palazzo Grassi, a famous ancient building in
Venice, now a museum and formerly supported by Fiat, was eventually sold to the french businessman François
Pinault in January 2005.
Fiat has recently begun sponsoring the Jamaican bobsledding team and promoting this sponsorship through commercials. Many like Jamaican athletes because they see them as underdogs and as people who enjoy life. While Volvo sponsors golf, Mercedes tennis, and Hyundai soccer, Fiat is trying to look unique and more light-hearted. Further, the team is relatively cheap to sponsor.
5
The group is present in many countries, not only in the West. Notably, it was one of the first companies to build factories in Soviet-controlled countries, with the best known examples in
Vladivostok,
Kyiv and
Togliattigrad. The Russian government later continued the joint venture under the name
AutoVAZ (known as
Lada outside the former USSR). The venture was most notable for the
Lada Riva. Fiat also has a subsidiary in
Poland at
Tychy, (formerly called FSM) where Fiat's small cars (the
126,
Cinquecento and now
Seicento) are made. Fiat also has factories in Argentina, Brazil, and Italy. In addition, its cars are produced through licensing and
joint-venture agreements in China, Egypt, France, India, South Africa, Turkey, and Vietnam.
6 Local variants of Fiats are produced at these factories as well as a world car, the
Palio. As of 2005, the company holds the first position in the Brazilian automobile market with a market share close to 25%.
Fiat has articulated that it wishes to focus on expanding into third-world markets because, in the words of former chairman Paolo Fresco, "those are the only markets where you can expect growth."
7 And it is true that Fiat's specialization in smaller cars puts it at an advantage in those markets, but cars sold in third-world countries tend to be much simpler than those sold elsewhere (e.g., most lack air conditioning), and thus require much less money to develop.
History
Giovanni Agnelli founded Fiat in 1899 with several investors and led the company until his death in 1945, while
Vittorio Valletta administered the day-to-day activities of the company. In 1903, Fiat produced its first truck.
8 In 1908, the first Fiat was exported to the US.
9 That same year, the first Fiat aircraft engine was produced. Also around the same time, Fiat taxis became somewhat popular in Europe.
10 By 1910, Fiat was the largest automotive company in Italy — a position it has retained since. That same year, a plant licensed to produce Fiats in
Poughkeepsie, NY, made its first car. This was before the introduction of Ford's assembly line in 1913. Owning a Fiat at that time was a sign of distinction. A Fiat sold in the US cost between $3,600 and $8,600 ($73,909 to $176,561 today). Compare this to the $825 ($17,000 today) Henry Ford charged for his first Model Ts in 1908.
11 However, upon the entry of the US into
World War I in 1917, the factory was shut down as US regulations became too burdensome. At the same time, Fiat had to devote all of its factories to supplying
the Allies, producing aircraft, engines, machine guns, trucks, and ambulances. After the war, Fiat introduced its first tractor.
12 By the early 1920s, Fiat had a market share in Italy of 80%.
13 In 1921, workers seized Fiat's plants and hoisted the red flag of communism over them. Mr. Agnelli responded by quitting the company, retiring to private life, and letting the workers try to run the company. Shortly afterward, 3,000 of them walked to his office and asked him to return to the helm — -a request to which he reluctantly agreed. In 1922, Fiat began to build the famous
Lingotto car factory — the largest in Europe up to that time — which opened in 1923. It was the first Fiat factory to use assembly lines. Fiat made military machinery and vehicles during
World War II for the
Italian Army and
Air Force and later for the Germans. Fiat made obsolete fighter aircraft like the biplane CR 42, which was one of the most common
Italian aircraft used along with the
Savoia-Marchetti, and also made light tanks and armored vehicles. These were weak compared to some of the
German and
Soviet counterparts, but were still used often. The best Fiat aircraft was the G 55 fighter but arrived too late and in too few numbers. In 1945 — the year Hitler's ally Mussolini was overthrown as leader of Italy - the
Italian Committee of National Liberation removed the Agnelli family from leadership roles in Fiat because of its ties to Mussolini's government. These were not returned until 1963, when Giovanni's grandson, Gianni took over as general manager until 1966 and as chairman until 1996.
14
Gianni Agnelli
Among Gianni's first steps after he gained control of Fiat was a massive reorganization of the company management, which had previously been highly centralized, with almost no provision for the delegation of authority and decision-making power. Such a system had worked effectively enough in the past but lacked the responsiveness and flexibility made necessary by Fiat's steady expansion and the growth of its international operations in the 1960's. The company was reorganized on a product-line basis, with two main product groups — one for passenger cars, the other for trucks and tractors — and a number of semi-independent division and subsidiaries. Top management, freed from responsibility for day-by-day operations of the company, was able to devote its efforts to more far-reaching goals. In 1967, Fiat made its first acquisition when it purchased Autobianchi. Then, in 1969, it purchased controlling interests in Ferrari and Lancia. According to ''Newsweek'' in 1968, Fiat was "the most dynamic automaker in Europe . . . [and] may come closest to challenging the worldwide supremacy of Detroit." In 1967 Fiat, with sales amounting to $1.7 billion, outstripped Volkswagen, its main European competitor; in 1968 Fiat produced some 1,750,000 vehicles while its sales volume climbed to $2.1 billion ($11.5 billion today). At the time, Fiat was a
conglomerate, owning
Alitalia Airlines, toll highways, typewriter and office machine manufacturer, electronics and electrical equipment firms, a paint company, a civil engineering firm, and an international construction company. That same year, Fiat acquired
Citroën — one of France's three major automakers at the time. However, in 1976, it sold the company. Following up on an agreement that Valletta had made with Soviet officials in 1966, Agnelli constructed the
AvtoVAZ plant in the new city of
Togliattigrad on the
Volga that went into operation in 1970 - producing a localised version of the
Fiat 124 - the infamous
Lada. On his initiative, Fiat automobile and truck plants were also constructed in industrial centers of
Yugoslavia,
Poland,
Bulgaria, and
Romania. In 1979, the company became a holding company when it spun off its various businesses into autonomous companies, one of them being Fiat Auto. That same year, sales reached an all-time high in the United States, corresponding to the
Iranian Oil Crisis. However, when gas prices fell again after 1981, Americans began purchasing
sport utility vehicles,
minivans and
pickup trucks in larger numbers (marking a departure from their past preference for large cars). Also, Japanese automakers had been taking an ever-larger share of the car market, increasing at more than half a percent a year. Thus, in 1984, Fiat and Lancia withdrew from the American market. In 1989, it did the same in the Australian market.
In 1986, Fiat acquired Alfa Romeo from the Italian government. In 1992, two top corporate officials in the Fiat Group were arrested for political corruption.
15 A year later, Fiat acquired Maserati. In 1995 Alfa Romeo exited the US market. Maserati re-entered the US market under Fiat in 2002. Since then, Maserati sales there have been increasing briskly.
Paolo Fresco
Paolo Fresco became chairman of Fiat in 1998 with the hope that the veteran of
General Electric would bring more emphasis on shareholder value to Fiat. By the time he took power, Fiat's market share in Italy had fallen to 41%
16 from around 62% in 1984.
17 However, a Jack Welch-like management style would be much harsher than that used by the Italians (e.g., precarious versus lifetime employment). Instead, Fresco focused on offering more incentives for good performance, including compensation using stock options for top and middle management.
However,his efforts were frustrated by union objections. Unions insisted that pay raises be set by length of tenure, rather than performance. Another conflict was over his preference for informality (the founder, Giovanni Agnelli, used to be a cavalry officer). He often referred to other managers by their first name, although company tradition obliged one to refer to others using their titles (e.g., "Chairman Fresco"). The CEO of the company, Managing Director Paolo Cantarella, ran the day-to-day affairs of the company, while Fresco determined company strategy and especially acted as a negotiator for the company. In fact, many speculated the main reason he was chosen for the job was to sell Fiat Auto (although Fresco fervently denied it).
18 In 1999, Fiat formed CNH Global by merging New Holland NV and Case Corporation.
Recent events
Over time, most automotive companies around the world have become
holding companies of foreign as well as domestic competitors. For example, the U.S. company
General Motors owned a
controlling interest in Sweden's
Saab Automobile and, until recently, in Japan's
Isuzu. Fresco signed a joint-venture agreement in 2000 under which GM acquired a stake in Fiat. This made it appear as if Fiat was next, although GM has made joint ventures with other companies (such as Toyota) without acquiring them. Nevertheless, Fiat did not see the GM partnership as a threat, rather as an opportunity to off-load its automotive business. The agreement with GM included a
put option, which held that Fiat would have the right to sell GM its auto division after four years at fair market value. If GM balked, it would be forced to pay a penalty of $2 billion. When Fiat tried to sell GM the company, GM chose the penalty. On
May 13 2005 GM and Fiat officially dissolved their agreement, and Fiat is now courting Ford.
19 The current CEO views alliances such as these as the deciding factor of the future success of Fiat.
As part of the recent divestitures, in 2003 Fiat shed its insurance sector, which it was operating through Toro Assicurazioni to the DeAgostini Group. In the same year, Fiat sold its aviation business, FiatAvio to Avio Holding. In February 2004, the company sold its interest in Fiat Engineering, as well as its stake in Edison.
Fiat faces a multitude of threats, including rising steel prices (up 68% between January and October 2004),
20 a strong Euro, and increased competition from Japanese and Korean car manufacturers in Europe. Although the light-vehicle market share of Japanese and Korean automakers in Europe is less than in the US (12.5% and 3.9%, respectively versus 30% and 3.9% in the US), it has been increasing steadily at about a half a percent a year.
21
Fiat has drawn criticism within
New Zealand for an advert they ran in
Italy, which a
New Zealand Ministry of Foreign Affairs and Trade spokesman described as "culturally insensitive and inappropriate". The advert showed women performing the
haka beside the new Fiat car and crowd noise is in the background to simulate the atmosphere in an
All Blacks rugby match. As the haka is finished a woman drives away in the Fiat car and a boy in the back of the car pokes out his tongue, which is the action used to finish the haka.
Sergio Marchionne
Nonetheless, Sergio Marchionne has begun to impress investors since taking over as CEO in June, 2004. Losses have fallen steadily since 2002, and Q4 of FY2005 saw its first profit in 17 quarters, and had a profit of 196M Euros for the first 9 months of FY2006.
22 Mr. Marchionne has succeeded more than Fresco in taking an axe to Fiat's bloated managerial bureaucracy and changing its tone to a focus on markets and profits. (Mr. Marchionne was raised in Canada by Italian parents.) While the charismatic chairman, the well-connected Luca di Montezemolo, dealt with politicians and unions, Marchionne rebuilt the car business. The success of the Grande Punto model has in large part been responsible for the turnaround in Fiat's fortunes.Fiat has formed a joint venture with India's TATA motors and has started its second innings with a force .
See also
★
List of Italian companies
★
List of automobile manufacturers
★
Simca
★
Neckar
External links
★
The Fiat Group
★
★
The Fiat car company
★
★
The official Fiat Commercial Vehicles website
★
Open directory of web sites about Fiat
★
Yahoo! Fiat SpA Company Profile
★
The FIAT Forum Comprehensive forum covering all FIAT models.
Endnotes
1.
2.
# Fiat Group, ''2001 Annual Report,'' p.42
# "Company Profile: Fiat S.p.A.", Datamonitor, May, 2005, p.18
# Ibid. p.18
# Ibid. pp.21 & 23.
# Mark Graham, "So Cool it Hurts", ''CAR Magazine'', October 2005, p.26
#
Fiat Group, "Automobiles: Fiat Auto" (accessed
December 29 2005).
# John Tagliabue, "Will GE's Fresco Bring Good Things to Fiat?" ''The New York Times''
September 12 1999.
#
Fiat Group, "History", (accessed
December 29 2005)
# Lauren Arthur "Our North Road Neighbors: When ME was home to Fiat", ''The Circle,'' p.4,
December 10 1987.
# Fiat, "History."
#
"Ford, Henry", Sobel, Robert, ''World Book Online Reference Center,'' World Book, Inc.
# Fiat, "History."
#
"Fiat SpA", ''Encyclopædia Britannica,'' Encyclopædia Britannica Online. (accessed
November 20 2005).
# Obituary, ''The New York Times,''
25 January 2003, A p1+
# John R. Weinthal, "Industrial Review: AUTOMOBILES", ''1992 Year in Review,'' Encyclopaedia Britannica, Inc.
# ''Automotive News 1985 Market Data Book'', Crain Communications, Inc.
# Luca Ciferri, "Fresco Brings Taste of New World to Fiat", ''Automotive News Europe'' (August, 1998) vol.72, p.6
# "Saving Fiat", ''The Economist,''
December 3 2005, p.64, vol.377
# "Company Profile", pp.23-24
# "Estimated Europe"
# Fiat S.p.A., "HIGHLIGHTS OF RESULTS", ''2006 Q3 Quarterly Report,'' p.11
#
"Fiat Auto Press article" (accessed
May 1 2007).
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