Fiat S.p.A.
Fiat S.p.A., commonly known as Fiat Group, was an Italian holding company whose original and core activities were in the automotive industry.
The Fiat Group contained many brands such as Fiat, Abarth, Ferrari, Maserati, Lancia and Alfa Romeo.
Fiat was founded in 1899 by a group of investors, including Giovanni Agnelli. During its more than century-long history, Fiat has also manufactured railway engines and carriages, military vehicles, farm tractors, and aircraft. In 2013, Fiat Group, together with Chrysler Group was the second largest European automaker by volumes produced, and the seventh in the world ahead of Honda, PSA Peugeot Citroën, Suzuki, Renault, and Daimler.
Over the years Fiat has acquired numerous other automakers: it acquired Lancia in 1968, became a shareholder of Ferrari in 1969, took control of Alfa Romeo from the Italian government in 1986, purchased Maserati in 1993, and became the full owner of Chrysler Group in 2014. Fiat Group currently produces vehicles under twelve brands: Abarth, Alfa Romeo, Chrysler, Dodge, Ferrari, Fiat, Fiat Professional, Jeep, Lancia, Maserati, Ram Trucks, and SRT.
In 1970 Fiat employed more than 100,000 in Italy when its production reached the highest number, 1.4 million cars, in that country. As of 2002, Fiat built more than 1 million vehicles at six plants in Italy and the country accounted for more than a third of the company's revenue.
Fiat-brand cars are built in several locations around the world. Outside Italy, the largest country of production is Brazil, where the Fiat brand is the market leader. The group also has factories in Argentina, Poland and Mexico and a long history of licensing manufacture of its products in other countries – in the 1960s, Fiat notably set up joint ventures in Eastern Europe with the best known being VAZ in the former Soviet Union. It also has numerous alliances and joint ventures around the world, the main ones being located in Serbia, France, Turkey, India and China.
Gianni Agnelli, the grandson of founder Giovanni Agnelli, was Fiat's chairman from 1966 until 1996; he then served as honorary chairman from 1996 until his death on 24 January 2003, during which time Cesare Romiti served as chairman. He was succeeded briefly by Paolo Fresco, who served as chairman, and Paolo Cantarella, as CEO. Umberto Agnelli then took over as chairman from 2003 to 2004. After Umberto Agnelli's death on 28 May 2004, Luca Cordero di Montezemolo was named chairman, with Agnelli heir John Elkann becoming vice chairman, and other family members also serving on the board. On 1 June 2004, Giuseppe Morchio was replaced by Sergio Marchionne as CEO.
On 29 January 2014, it was announced that Fiat Group was to be merged with Chrysler Group into Fiat Chrysler Automobiles, taking place before the end of 2014. Fiat Chrysler Automobiles became the new owner of Fiat Group. On 1 August 2014, Fiat Group. received necessary shareholder approval to proceed with the merger. The merger became effective 12 October 2014.
History
Giovanni Agnelli, with several investors, founded the Fabbrica Italiana Automobili Torino in 1899. Its acronymous name was changed to upper- and lower-case Fiat in 1906. Agnelli led the company until his death in 1945, while Vittorio Valletta administered the firm's daily activities. Its first car, the 3 ½ CV, of which only 24 copies were built, all bodied by Alessio of Turin, strongly resembled contemporary Benz, and had a boxer twin engine. In 1903, Fiat produced its first truck. In 1908, the first Fiat was exported to the US. That same year, the first Fiat aircraft engine was produced. Also around the same time, Fiat taxis became popular in Europe.By 1910 Fiat was the largest automotive company in Italy – a position it has retained since. That same year, a new plant was built in Poughkeepsie, NY, by the newly founded American FIAT Automobile Company. Owning a Fiat at that time was a sign of distinction. The cost of a Fiat in the US was initially $4,000 and rose up to $6,400 in 1918, compared to $825 for a Ford Model T in 1908, and $525 in 1918, respectively. During World War I, Fiat had to devote all of its factories to supplying the Allies with aircraft, engines, machine guns, trucks, and ambulances. Upon the entry of the US into the war in 1917, the factory was shut down as US regulations became too burdensome. After the war, Fiat introduced its first tractor, the 702. By the early 1920s, Fiat had a market share in Italy of 80%.
In 1921 workers seized Fiat's plants and hoisted the red flag of communism over them, to which Agnelli responded by quitting the company. However, the Italian Socialist Party and its ally organization, the Italian General Confederation of Labour, in an effort to effect a compromise with the centrist parties ordered the occupation to end. In 1922, Fiat began to build the famous Lingotto car factory—then the largest in Europe—which opened in 1923. It was the first Fiat factory to use assembly lines; by 1925, Fiat controlled 87% of the Italian car market. In 1928, with the 509, Fiat included insurance in the purchase price.
Fiat made military machinery and vehicles during World War II for the Italian army and Regia Aeronautica, and later for the Germans. Fiat made fighter aircraft like the biplane CR.42 Falco, which was one of the most common Italian aircraft, along with Savoia-Marchettis, as well as light tanks, obsolete compared to their German and Soviet counterparts, and armoured vehicles. The best Fiat aircraft was the G.55 fighter, which arrived too late and in too limited numbers to impact the outcome of the war.
In 1945 the National Liberation Committee 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.
Fiat launched a nuclear research program in the 1950s. It was the first private company in Europe to host its own nuclear reactor.
Gianni Agnelli
Among the younger Agnelli's first steps after gaining control of Fiat was a massive reorganization of the company management, which had previously been highly centralized, with little provision for the delegation of authority and decision-making. Such a system was effective in the past, but lacked the responsiveness and flexibility needed by Fiat's steady expansion, and the growth of its international operations in the 1960s. 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; with sales amounting to $1.7 billion, it outstripped Volkswagen, its main European competitor, and in 1968 produced some 1,750,000 vehicles while its sales volume climbed to $2.1 billion. According to Newsweek in 1968, Fiat was "the most dynamic automaker in Europe... may come closest to challenging the worldwide supremacy of Detroit." Then, in 1969, it purchased controlling interests in Ferrari and Lancia. At the time, Fiat was a conglomerate, owning Alitalia, toll highways, a typewriter and office machine manufacturer, electronics and electrical equipment firms, a paint company, a civil engineering firm, and an international construction company. Following up on an agreement Valletta had made with Soviet officials in 1966, Agnelli constructed the AvtoVAZ plant in the new city of Togliattigrad on the Volga. This began operation in 1970, producing a local version of the Fiat 124 as the Lada. On his initiative, Fiat automobile and truck plants were also constructed in industrial centers of Yugoslavia, Poland, Bulgaria, and Romania. In 1973, Fiat established Comau, an industrial automation company out of the various suppliers which had equipped the AvtoVAZ plant in Russia. Comau became an industry pioneer in the use of Robotics for vehicle assembly – a technology with which Fiat would become synonymous for in the 1970s, with its "Robogate" system for bodyshell manufacture, and the later FIRE family of robot-assembled engines in the 1980s.Despite offering a relatively competitive range of cars, Fiat was not immune from the financial pressures that the auto industry confronted following the 1973 oil price shock. Towards the end of 1976 it was announced that the Libyan government was to take a 9.6% shareholding in the company in return for a capital injection worth an equivalent of £250 million. The size of the Libyan investment is apparent when it is compared to the £310 million IMF loan that the Italian government was trying to negotiate at the time. Other aspects of the Libyan agreement included the construction of a truck and bus plant at Tripoli. Chairman Agnelli candidly described the deal as "a classic petro-money recycling operation which will strengthen the Italian reserves, provide Fiat with fresh capital and give the group greater tranquility in which to carry out its investment programmes". Equally noteworthy was the fact that despite the dilutive effect of the Libyan investment on existing shareholders, the company's largest shareholder, the Agnelli family, retained a 30% stake in the recapitalised business.
In 1979 the company became a holding company when it spun off its various businesses into autonomous companies, one of them being Fiat Auto. Vittorio Ghidella was named CEO. That same year, sales reached an all-time high in the US, 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. Also, Japanese automakers had been taking an ever-larger share of the car market, increasing at more than half a percent a year. Consequently, in 1984, Fiat and Lancia withdrew from the United States market. In 1989, it did the same in the Australian market, although it remained in New Zealand.
In 1986 Fiat acquired Alfa Romeo from the Italian government. Also, in 1986 15% of Fiat company stock was still owned by Libya, an investment dating back to the mid-seventies. US foreign policy under President Reagan's administration canceled a Pentagon contract to produce earth movers with Fiat and pressured the company into brokering a buyout of the Libyan investment. In 1992, two top corporate officials in the Fiat Group were arrested for political corruption. 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.