Abstract
The second half of the Eighties was an excellent period for the Fiat Group’s consolidated accounts. The most dramatic problems (including, above all, those of Fiat Auto and Iveco) seemed solved or about to be solved thanks to the work of the feudatories of that time, or, metaphors aside, thanks the work of the generation of managers who had been identified at the turn of the previous decade. Even though they had not contributed directly to industrial results, Gianni Agnelli and Cesare Romiti could boast the gigantic historic merit of having chosen those men and letting them work in peace. If Cesare Romiti had given up his responsibilities in 1988, on reaching sixty-five, as happens to all chief executives in all modern broad-based shareholding companies, he would have retired with great glory and would have avoided going through, and making the Group go through, some unpleasant moments. Instead, while I was up to my neck in recovering and relaunching Iveco, there unfolded the drama of Vittorio Ghidella, an event that was to influence the destiny of Fiat and also my own professional life a few years later.
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Notes
- 1.
One day, a few months before Ghidella’s departure, Romiti called me to his office and solemnly communicated that my image would have to appear more outside the Group. I replied that this would have to be in favour of Iveco lorries and not of any gratification on my part. Romiti discussed the matter with the head of the press office, Alberto Nicolello, but as I foresaw, progress was very lukewarm; a couple of terrifically dull technical articles came out and that was that. Romiti did not bring the argument up again. This deliberately unassuming attitude of mine favoured the attempt Romiti set up, from 1994 onwards, to erase all traces of my passage in Fiat, as I shall tell in Chap. 12.
- 2.
There were two well-known cases. One involved a pointlessly complex automated system for coupling the engine and gearbox; the other concerned a robot equipped with sight (used for mounting wheels) that was too far ahead of the times. In addition, the accusation of having constructed an entire plastics department that was used only for the rear door of the Fiat Tipo and then dismantled strikes me as one of those disagreeable episodes that are inevitable in the business, when technology takes unexpected paths.
- 3.
Except for the amoveatur of Tufarelli, which I mentioned in a note to Chap. 2.
- 4.
“la Repubblica” of 28 August 1988 ran the headline Gran lite alla Fiat (“Big row in Fiat”), including the news of an enquiry into suppliers of Fiat Auto decided by Romiti unbeknownst to Ghidella (picked up again on 11 September by “Panorama”).
- 5.
Translator’s note: as already said, the title Avvocato was commonly accorded to Gianni Agnelli.
- 6.
A minor event happened then, which I mention here because it helps to understand the totalizing impact that Fiat had on the private lives of its managers in the small world of the city of Turin. In that very period my wife had organized a party in palazzo Barolo to be held at the beginning of December to celebrate my fiftieth birthday, and all Fiat’s top managers had confirmed their presence. Following the announcement in Marentino of Vittorio Ghidella’s dismissal, the head of Employee Relations, Enrico Auteri, called me: “You’ll have to postpone your party so that it doesn’t look as if you’re celebrating Ghidella’s departure”. I replied that the party was for my birthday and that Ghidella had nothing to do with it; if top management did not want to come they ought to telephone my wife to decline and apologize; he called and top management did not come.
- 7.
For example, in a letter of his published in full in “Avanti!” of 16 March 1989. The Italian edition of “Fortune” of July 1989, in giving the news of the sale of Sept to Gilardini, relaunched that news.
- 8.
See Chap. 1.
- 9.
This episode came back to mind in the days preceding my own ouster, 8 years after Ghidella’s, and I predicted to Gianni Agnelli that Romiti’s wrath would have raged against me, trying to harm me, pursuing me outside Fiat even afterwards. It wasn’t a hard prophecy to make.
- 10.
I remember that: (1) Fiat Agri was strong only in Italy and France but did not even have its own sales network, operating respectively through Federconsorzi and a few importers; (2) the European market was undergoing an epic collapse; (3) presence in agricultural machinery was weak because Hesston in the USA had little to do with the product sold in Europe; (4) the heritage of Fiat Allis had been followed by the Fiat-Hitachi joint venture, in which we were dependent on Japanese technology; (5) all things considered, Fiat Geotech, as the complex of the two branches was now known, no longer had the means to keep up a complete global range.
- 11.
I find the first trace of Ford’s proposal in a handwritten note of mine dated Thursday 23 November 1989: “The Ford lorry operation is looking good. We take 20 % of them in the USA […], they take 20 % of us […], we set up a powerline company [i.e. engines, gearboxes, axles, etc.] with us in the majority […] But… there is a but. And Trotman telephoned it to me in a strange message […]: 20 % of Iveco is worth a great deal. They have to pay a compensatory sum and they don’t feel like it, after the expense of Jaguar […]. So? […] Alternative: let them give us the tractors in exchange. […] Incredible! Shall we manage do this? There are at least some probabilities”. Ford had only just bought Jaguar, in exchange for a price that was universally considered excessive: on the ground floor, in the World Headquarters building in Dearborn, there was a Jaguar on display that according to a currently fashionable quip was not red as it seemed, but solid gold.
- 12.
On 26 September 1990 I presented the initiative before the Executive Committee of the Fiat Board, showing the extraordinary data I reproduce in Document 5 of Chap. 14.
- 13.
Starting from the end of February 1990, some joint Fiat-Ford work groups developed studies and analyses related to the new entity, which would have emerged from the merger between Ford New Holland and Fiat Geotech. A memorandum in this sense was signed by Cesare Romiti and Harold “Red” Pauling on the 14th of that month. It was unusual for the seller to take part in such an exercise together with the buyer, with the aim of forecasting the organizational steps that would have been taken after the sale; but for us it was handy to know the Company purchased as well as possible so as to be ready to make our moves right from the first day, and Ford had an interest in ensuring that no problems of ours had negative repercussions on it in future (even only in terms of image!). Above all, unlike the UK lorry operation of 1985, in this case the managers coming from Ford had no choice: they had to follow the fate of the company in which they worked. On 6 April a joint communiqué gave the news to the world: “The Ford Motor Company and the Fiat Group announce that talks are underway that could lead to agreements on a world level regarding their activities in the tractor and agricultural machinery sectors”.
- 14.
When I informed him of the choice of London as headquarters of the new unified Company, Ruggeri refused to go. He raised no doubts about the correctness of the decision but stated that he was unable to move there to carry out the role I was asking him to do because he knew no English. I started to laugh: “Learn it”. He told me that as a youngster he had had a stammer, and that even now he would stumble when he was under a lot of stress and that this created a psychological block so strong that it prevented him from learning any foreign language. We discussed the matter at length; in the end he accepted, on the explicit condition that his post there would be a brief one: “I have sworn to my wife that I shall be back in Italy no later than the end of 1992”, he told me. “I ask you never to ask me to fall short of this commitment”. On his own account, Ruggeri did not respect the deadline he had set himself and fate, through the intervention of the Milan public prosecutor’s office, ensured him the position, with Gianni Agnelli’s approval, as I shall be saying in Chap. 12.
- 15.
Years later, Riccardo Ruggeri published a book (The New Holland Case, Written by its Management) that told of the merger, restructuring, and relaunching. The author’s imprinting in the field of employee relations emerged in certain tones that were rather too lyrical for my taste but, once the text is purged of these rhetorical and psychological connotations, the list of the steps taken can be read in a substantially correct manner, which spares me any need to dwell on this argument any further here.
- 16.
The contract was enormous and contained no clauses that were explicitly breached; the net value of the asset had been lowered, but this case had been foreseen and involved a refund of Ford’s part, which in fact happened; the level of stocks in the warehouse was high, but was still within permissible limits. The problem lay in the fact that Ford management had deferred the slowing down in production and the staff cuts that market conditions would have required, letting all costs accumulate at our expense along with those of the merger. This was understandable; what was intolerable was that Ford had kept us in the dark about what was going on with the argument (or the pretext) of the anti-trust authority, leaving us faced with a fait accompli. Ford had not behaved like a “good family father” in its management of the Company during the transitional period and had concealed knowledge of reality from us.
- 17.
A single example, from among many, taken from the “New Car Buyer” of 1990: in the first three months of use of every vehicle the few customers of Fiat’s three marques in Germany complained about 1.89–2.89 problems; the same statistic was from 1.08 to 1.24 for the French brands, 1.16 for Volkswagen, and for 0.55–0.71 for the Japanese.
- 18.
That same day, in the afternoon, I flew to Milan in a helicopter with Gianni Agnelli and Cesare Romiti, to listen to the historic speech given by Mikhail Gorbachov, which the prime minister, Giulio Andreotti, and the chairman of Confindustria, Sergio Pininfarina, had organized for the benefit of five hundred applauding industrialists.
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Garuzzo, G. (2014). Ghidella is Kicked Out of Fiat Auto and Garuzzo Conquers New Holland (1989–1990). In: Fiat. Springer, Cham. https://doi.org/10.1007/978-3-319-04783-6_7
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