Italian industrialist Giovanni Agnelli (born 1920) was a leading capitalist in Italy, controlling a group of enterprises that employed 360,000 workers and had annual sales of over $15 billion.
Giovanni Agnelli reigned for thirty years as one of the most prominent industrialists in Europe, spending his youth as one of the most notorious playboys in Europe. Born in Turin, Italy, he was known as Gianni Agnelli or "L'Avvocato" (the lawyer) because he once received a law degree. His grandfather, Giovanni Agnelli, Sr. (1866-1945), established FIAT (Fabbrica Italiana Automobili Torino, the Italian Car Factory, Turin) at the beginning of the 20th century. When Giovanni's son, Edoardo Agnelli, died in an airplane accident, Gianni and his younger brother Umberto became heirs of the largest private enterprise in Italy.
At the time of their father's death, neither Gianni nor Umberto were willing or able to take over the management of the FIAT empire. During the years of Fascism their grandfather allowed all management and power to be concentrated in the hands of Vittorio Valletta. Valetta found it profitable for FIAT and himself to collaborate with the Italian Fascists and German Nazis before and during the war and all the way to the 1943 armistice. The Valletta reign continued after the war and after the death of Giovanni Agnelli, Sr. in 1945. Giovanni Jr. was not prepared for the task, even though from childhood his main goal was to become the head of FIAT and manufacture automobiles. Valletta retired in 1966 and died in 1968.
Playboy to Patriarch
Giovanni Agnelli, Jr. was 46 when he took over FIAT, and his 20 years in the "wilderness" had been spent mostly as a millionaire playboy rather than as a financial and industrial genius. He finally arrived at the headquarters of FIAT in Turin during a period of extraordinary economic expansion in Italy ("the economic miracle"). After 1966 he found himself with total power over a company which had major problems. Valletta had reigned in the old heavy-handed paternalistic style and left Giovanni with an ossified organization incapable of adjusting to the new economic realities of the 1960s. The great empire was overwhelmed by confusion, disorganization, and internal power struggles among its executives. Neither executives or engineers were willing to accept major changes in procedure or attitude for fear of losing the power of their particular fiefdoms. The scenario which developed presented Agnelli in public as "Mr. Capitalist" of the Italian business world, while inside his own company he was confronted by colleagues who wanted to stop him from affecting any real changes. The story of Giovanni Agnelli is that of a continual battle for control and renewal of FIAT between 1966 and 1985, from which he emerged eventually as the victor.
Successes and Failures
His record at the helm of the industrial giant is marked with both successes and failures through some very difficult times. Where Valetta had conducted an unrelenting and autocratic witch hunt against leftists and labor organizers, Agnelli pursued pragmatism above everything. He made alliances in a business-like fashion regardless of politics, using persuasion and strategy to subdue even his strongest rivals. At the beginning of his reign, Agnelli invisioned expanding FIAT internationally, much as Volkswagen had done. This turned into disaster, and a grandiose scheme of joining with French car makers dried up sooner than the ink on the agreement.
The 1970s were trying times for Agnelli, as well as for every established industry connected with the automobile. The 1974 OPEC crises made the Western world vulnerable to oil producers' blackmail. Agnelli's main battle was with government controlled or protected enterprises. He believed in strong administrations in the Valetta tradition, but always retained the ultimate controls himself. At the time many believed that FIAT was a lost cause. But Agnelli never lost optimism, although he put up a front of desperation to convince his workers to produce more for less money.
He attempted to forge an alliance with workers and unions in a grand design for a renaissance of capitalism. He played cat-and-mouse with unions but took advantage of their errors so as to make them inconsequential in the decision-making process at FIAT. In the 1980s he eventually succeeded in putting a car on the market whose popularity once more made FIAT a profitable enterprise. Furthermore, in the 1980s he waged a battle against publicly owned enterprises by taking control of some and helping in the privatization of others.
The Agnelli Empire
By the end of his reign in 1996, the $46.5 billion FIAT empire included a major publishing company, a food producer, an insurance company, and accounted for 25 percent of the capitalization of the Milan Stock Exchange. In 1927 the grandfather Giovanni Agnelli, Sr. created IFI, a financial holding company that sold preferred stock to outsiders but retained all the common stock for the Agnelli family. IFI owns 33 percent of FIAT, as well as common stock in large insurance companies, a department store chain, an important Italian newspaper, a soccer team, and numerous other enterprises. Agnelli's empire is one of the largest in Europe. Out of 20 million Italian workers, about 1.5 million are directly or indirectly dependent upon FIAT and the decisions made be Giovanni Agnelli and his heirs.
In 1996 Agnelli, diagnosed with cancer, finally retired from his post as chairman of FIAT, being replaced by a loyal lieutenant, Cesare Romiti. His son Giovanni, also a member of the board, is being groomed as his eventual replacement.
Further Reading on Giovanni Agnelli
A history of Agnelli's influence on Italian power is Alan Friedman, Fiat and the network of Italian Power (1989). Giovanni Agnelli is discussed as part of the "economic miracle" in Fortune (May 1968). A journalistic approach to Agnelli between 1966 and 1985 is Guiseppe Turani, L'AVVOCATO, Spreling & Kupfer, editors (Milan 1985). An earlier book on the period, Antonio Mosconi, Il gruppo dell' impressa industriale, analyzes the dichotomy between public and private capitalism in Italy. Articles about the end of Agnelli's reign include John Tagliabue, "Agnelli says he will retire from Fiat post," New York Times (Dec. 12, 1995), and Maureen Kline, "Fiat Chairman Agnelli to End Era By Stepping Down," Wall Street Journal (Dec. 12, 1995). An account of the recent history of the Fiat empire is Charles P. Wallace, "The Next Mr. Fiat?," Fortune (Oct. 14, 1996).