Abstract
I was very surprised to remain in Fiat following Carlo De Benedetti’s departure. I had always taken it for granted that, as I had come with him, so I would have left.
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Notes
- 1.
At the time, Mauro Ferrari was still under thirty and was much appreciated by Carlo De Benedetti who had him nominated direttore of one of the companies in the Components Sector, an enormous responsibility for such a young man, whose only previous experience had been with a small distribution company selling low-tech products. Later, he was put in charge of CIR, the holding company owned personally by Carlo De Benedetti, but relations between the two very soon deteriorated.
- 2.
I do not recall if Franco Debenedetti was also present at the strange meeting. He remained in Fiat as head of the Components Sector, an appointment that followed the dismissal of Gianmario Rossignolo.
- 3.
Later, in 1978, Carlo De Benedetti invested the money received from Fiat in the purchase of a shareholding in Olivetti, of which he became a “reference shareholder”, according to the term that he himself contributed to divulging (and that in my view took on a rather euphemistic connotation, knowing his direct way of running companies personally). It is odd that a few years before, replying to his request to identify companies to buy, I had mentioned Olivetti, then chaired by Ottorino Beltrami, who had with him Marisa Bellisario, a couple with whom I had worked for a long time in the Seventies. But then Gilardini ended up in the Fiat Group and my suggestion came to nothing.
- 4.
The introduction of the budget and incentives based on targets was, explicitly, one of the tasks for which Carlo De Benedetti had hired me in 1973. At the end of every year the annual report was prepared with the favourable and unfavourable deviations with respect to the budget, and it was easy to calculate the total retribution owed to every interested party on the basis of parameters that had been defined beforehand. After the deduction of the official salary paid in the course of the year, which was considered an advance, the balance was paid directly to each party in bank notes. The band of fluctuation permitted for every individual payment was broad, so much so that the variable part could reach 50 % of the total and sometimes even more. The system was therefore deliberately highly incentivising, in harmony with the aggressive spirit of the Company on the markets. The excellent results of those years were translated into excellent emoluments for all, myself included. Apart from the manner in which cash payments were made, rather unorthodox albeit normal in the Italy of those years, the methodology employed in Gilardini was in the avant-garde even in comparison with the most modern countries, so much so that it was adopted by Fiat in the early Eighties, with some unsubstantial variations. Twenty years later the method was to come into general use everywhere.
- 5.
The determinant factor was the law that attributed criminal responsibility to dirigenti for a failure to declare payments (who could yet agree to assume penal responsibility for themselves with the sole purpose of doing a favour to the receivers of the salaries or the company shareholders?). Even more determinant was the attitude that the judiciary habitually adopted in work-related lawsuits (any employee or dirigente could request the payment of the contributions omitted—and hence the taxes, with the criminal consequences mentioned above—even after many years had passed: some used this threat as a form of blackmail when they no longer found themselves in agreement with the company).
- 6.
The salaries reserved for ex-Gilardini dirigenti were transformed into official payments by Fiat. But this was done gradually over three or four years so as not to be conspicuous.
- 7.
See Chap. 10.
- 8.
I shall continue to identify Comau as a “machine tool manufacturer”, a traditional but erroneous reference because it was terribly belittling.
- 9.
Things went differently on another occasion when some “private” entrepreneurs made me an “anomalous” proposition. These people offered me a sum equivalent to ten years of my salary to “represent their interests”, in other words to have Fiat buy one of their insolvent companies at a high price. I was so shocked by this proposal that I hastened to tell Umberto Agnelli and Cesare Romiti about it. “So close to us…” was Gianni Agnelli’s comment when they told him about the approach.
- 10.
But he had to accept two preventive conditions, which I explained were non-negotiable. The first condition dictated that there could be no compensatory sums of money between Fiat and the other shareholders in other words the merger of the companies involved had to come about exclusively via share swaps, paper against paper. I said this because I knew that if the “private” shareholders had got wind of hard cash, in a period in which such goods were thin on the ground, then blood would soon have been flowing in the corridors. On the basis of the second condition, he, Sergio Rossi, had to be my sole interlocutor. I did not want anything to do with dozens of “private” shareholders, each busily defending his own interests with all the means at his disposal, interests that were different to those of the others; it was up to him to get his colleagues to agree, using the methods he thought best. Sergio Rossi understood and agreed on the spot, without thinking about it.
- 11.
On the subdivision of Fiat into Sectors, the new name had substituted the old one of Officine Ausiliarie Fiat.
- 12.
Translator’s note: after Fiat won a major contract to build the automobile manufacturing plant of AvtoVAZ, the city on the Volga river was renamed Tolyatti, known in Italy as Togliattigrad, after the longest-serving secretary of the Italian Communist Party.
- 13.
I shall not dwell on the other components that merged with Comau. The most important was Morando, a company whose shareholders did not include Fiat and one that had a great reputation in the field of vertical turret lathes. But Morando was in deep trouble, also because of the cancellation of the Italian nuclear programme. Then there were, in various situations of equity ownership and performance, ColubraLamsat. IMP, SASS, and Di Palo, as well as two companies specialized in moulds, IMPES and Berto Lamet.
- 14.
A contributory factor here was that in the Eighties, Paolo Cantarella, an ex assistente to Franco Debenedetti and Cesare Romiti, was nominated to flank Sergio Rossi as head of Comau. The tales that began to arrive in corso Marconi were terrible, disastrous for Rossi. Cantarella stated that he had been seriously opposed in Comau, so much so that threatening messages against him had appeared on the factory walls. Romiti very much appreciated the young man’s conduct in this critical situation, and he mentioned this to me several times. Rossi was dismissed and replaced by Cantarella.
- 15.
First, the system could assemble motor cars of various types, even if they were presented randomly, what came along, came along; it recognized the model by itself, then it automatically shifted certain tools that fixed the geometry of the body, found the right software and finally activated the electric welding robots that stitched together the metal plates of the vehicle. Factories became flexible, no longer rigidly bound to the production of a single type of vehicle. All this improved the response to the changing requirements of clients and solved the problem, disastrous but frequent in the car industry, of when one factory no longer had vehicles to produce while another, destined for a different, successful model, could no longer keep up with demand. Second: there would no longer be any need to throw away all the old equipment when new car models came out to replace the old ones: all that was necessary was to replace a few geometric tools and the software the system activated again immediately, with enormous savings in start-up times and investment costs. Third: this caused the disappearance of worker fatigue in one of the toughest departments of the entire motor car production process, the so-called ferrolastratura or car body welding; in fact, these workers disappeared, replaced by robots. Only those who have not spent eight hours a day welding car bodies holding electric welders weighing ten or twelve kilos above their heads can regret the passing of this manual labour.
- 16.
I absolutely do not mean to suggest that Sergio Rossi was the inventor of Robogate, but that he was a strong supporter and an efficient promoter of this idea. The effective conception and realization should be attributed to a team effort to which, apart from Comau, a substantial contribution was made by the technicians of Fiat Auto Production, then headed by Bracco, with Nicola Tufarelli as Sector Head.
- 17.
Still in 1984, when I was sent to head Iveco, I discovered that the practice was widespread, I had it cease instantly.
- 18.
Fiat Ferroviaria Savigliano and two 50 % shareholdings in Omeca and Ferrosud, located in southern Italy.
- 19.
Translator’s note: Assolombarda is the largest entrepreneurial association in Italy, with many thousands of associates.
- 20.
It was only in the Nineties that a Fiat functionary, Massimo Carello, became the first to make progress within the Confederation of British Industry, after Fiat had become an important local producer through Iveco, New Holland, and Magneti Marelli. Carello was a member of the Chairman’s staff, but no one ever deluded himself that he could have become the number one in London, and certainly not because he was less worthy than Pellicanò.
- 21.
The first in particular always held me in great esteem and friendship: I had worked for him for some years in General Electric in the Sixties, he taught me a great deal and it was he who nominated me dirigente. His permanence as head of Milan’s Unione Industriale cost him a great number of legal problems for events that had involved him but certainly not for personal interest; he faced those troubles with the same serenity and firmness with which he had commanded (and always brought home to port) the submarine under his command during the war.
- 22.
The reactor had been conceived not to generate electricity but to study the behaviour of materials subjected to radiation, because (correctly) it was believed that European industry could have made a greater contribution to that field. The two great Italian companies were complementary, as Fiat was oriented towards mechanics and Montecatini towards chemicals.
- 23.
Translator’s note: a state-funded bank entity in charge of supporting innovation.
- 24.
Translator’s note: a steel mill built at the beginning of the century strategically close to the iron mines and the hydroelectric power plants of the Aosta valley.
- 25.
The last emblematic realization under Fiat management was the G91 fighter/trainer, under the direction of Giuseppe Gabrielli, already legendary in the Seventies. Instead, the unit producing aero engines (Fiat Avio) remained entirely in Fiat.
- 26.
In Italy, most of the funds destined for defence were absorbed by the current operations, to support low-level employment in more or less poor areas, where military arsenals had been located for generations. Moreover, production volumes were insufficient to pay for sophisticated research.
- 27.
Iveco was a BV (private limited liability company) incorporated in Holland, but management was always in Turin.
- 28.
Gianni Agnelli began to keep himself informed about Fiat affairs at a much later date, at the end of the Eighties, and then, more assiduously, in the Nineties. At the time of the account, the presidente (Chairman) was not a part of the Comitato Direttivo (Steering Committee) and took part only rarely, and distractedly, in the Company’s internal meetings.
- 29.
Vertice aziendale (top management), also used in the plural, Vertici aziendali, was a Fiat term of unknown origins that emerged from the communiqués of the Employee Relations department. The Fiat board was then totally absent in every sense of the word: the presidente (Chairman) was a charismatic but detached entity, to whom you could not refer any operative matters, the amministratori delegati (CEOs) the direttori centrali and the respective direttori addetti, came and went. The necessity was felt for an all-embracing term that was sufficiently vague and flexible: the personnel department was not found wanting and coined the expression “vertice aziendale”, whose content no one ever took the trouble to define precisely.
- 30.
I let him say so but in reality the “credit” was to be ascribed to others.
- 31.
The murder was perpetrated on 21 September 1979 in Turin’s via Petrarca, a few metres from my office, then located in via Campana. For us Fiat dirigenti the crime was a shock. Ghighlieno did not hold a pre-eminent or strategic position: he co-ordinated the “logistical” function, whose task was to make sure cars reached their new owners at the right time, preferably in the right colour and with the optionals requested. I wondered if the label “logistical” had attracted the attention of the criminals for that slightly military air that their imaginations attributed to it, or, more subtly, if it was precisely customer service that they wanted to boycott. I discovered later that it was neither one nor the other; a former collaborator had indicated the victim, at random. The Red Brigades had studied my cluster project for the Components Sector. In one of their hideouts, called “dens” by the press, the authorities found a document that contained a detailed description of the structure and analysed the consequences of its industrial efficiency. Between the lines one glimpsed a certain industrial satisfaction, almost admiration. Then, in the closing lines, the tone changed brusquely, clearly the work of some “political commissar”, and the entire project was referred to as a monstrous scheme contrived to damage the proletariat. In that document I could read explanations and objectives that not only had never crossed my mind, but also struck me as unthinkable for any human mind. In those days all us Fiat dirigenti were at risk, and we knew perfectly well that it would not have been the bodyguards to save us in case of attack. In general, we took this philosophically. The most serious harm concerned the families, children above all, who lived in an apprehensive climate of civil war, kept up by the perennial presence, useless but brooding, of the personal escort.
- 32.
Pansa and Romiti, op. cit.
- 33.
Gianni Agnelli’s doubts must have been even greater and more contagious, if we consider the impact they had on Carlo De Benedetti’s morale, as I mentioned in Chapter 1.
- 34.
Cesare Romiti recalled on many occasions how much Fiat was in debt on his arrival in 1975 and boasted about his own efforts aimed at finding lines of credit, until the injection of Libyan capital. This is true and his merits in this sense should be widely recognized. But those debts did not come from nowhere: they were the legacy of Valletta’s era and the consequence of Fiat’s incapacity, as he had left it, to face the challenges of the new decade, the Seventies.
- 35.
The press coined the stereotype, unacceptable from a semantic standpoint but liked by the unions, of a company that was “healthy but overwhelmed by debt”.
- 36.
As I mentioned before, Cesare Romiti took absolutely no interest in the management of Fiat Auto, either to modify negative trends in the technical or commercial fields, or to improve industrial relations. In my direct experience of those years I saw no trace of what he wrote in his book of 1988 (Pansa and Romiti, op. cit., p. 17): “It was then, precisely in 1975, that we began to lay the groundwork of the task destined to come to completion towards the end of 1979, on the eve of the year of the turning point”.
- 37.
Translator’s note: the Author habitually uses the term camion, asserting that the lofty term “industrial vehicle” distorts reality. In this translation, apart from the official name of the Sector, the British term “lorry” is used, in preference to the American “truck”.
- 38.
Fiat, OM, Lancia Veicoli Industriali, Unic (in France) and Magirus (in Germany). As we shall see in Chap. 7, the process was not to be completed until the beginning of the Nineties.
- 39.
Translator’s note: now Le Meridien Piccadilly Hotel.
- 40.
I met Mike Edwards again, by then getting on in years, at a conference in Birmingham in 1996. I did not get the impression that he remembered the lunch at the Piccadilly Hotel.
- 41.
In the Nineties, in the vain attempt to make the whole thing less rigid, an enormous single table was made with tapering sides. On one of the short sides a slide projector was mounted, and the powers that be were moved to the opposite extremity.
- 42.
Some time before, Tufarelli had already been moved from Fiat Auto and, promoveatur ut amoveatur, he had been co-opted onto the Board of Fiat SpA.
- 43.
The account given by Cesare Romiti in his book (Pansa and Romiti, op. cit., p. 68) is different because he attributes to himself the responsibility (or the merit) of having requested the dismissal of the dirigente (too much under his brother’s influence). My version is the one referred to me by the interested party at the time and confirmed by Romiti himself.
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Garuzzo, G. (2014). New Initiatives and Old Problems (1976–1978). In: Fiat. Springer, Cham. https://doi.org/10.1007/978-3-319-04783-6_2
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