Fiat says chairman Montezemolo stepping down

Fiat says chairman Montezemolo stepping down

Turin, Italy: Fiat chairman Luca Cordero di Montezemolo is stepping down after seven years piloting the Italian industrial giant through tough times, the company said on Tuesday.

“Luca Cordero Di Montezemolo will announce his intention to step down as chairman of the group during a press conference this afternoon," Fiat said in a statement.

The statement did not confirm reports that Montezemolo, 62, will be succeeded by vice chairman John Elkann, the 34-year-old grandson of historical Fiat boss Gianni Agnelli.

But the company said Elkann and chief executive Sergio Marchionne would be by his side at the press conference.

Montezemolo, who will remain on the supervisory board and at the head of Ferrari, decided to step down because he believes he has “fulfilled the task that was assigned to him by the (main) shareholder in May 2004," Fiat said.

Under the leadership of Italian-Canadian Marchionne and Montezemolo, Fiat weathered the global economic crisis and became a key shareholder with 20% in US group Chrysler.

The news agency ANSA said that Montezemolo had told people close to him at Fiat that he was “relaxed, content and relieved" about the decision.

Elkann is currently the head of Exor, the Luxembourg-based holding company that controls Fiat.

The son of Agnelli’s daughter Margherita and the writer Alain Elkann, John Elkann would be the youngest chairman in the group’s history.

La Repubblica also said that in 20 days, Elkann will also be named head of Gianni Agnelli & C. Sapaz, the master holding company of the Agnelli family.

Markets reacted positively to the Agnelli’s consolidation of power within the company and to growing rumors of a spin off of Fiat’s car business from the rest of the group, with Fiat’s stock posting gains of more than eight percent in mid-afternoon trade.

The Fiat group, best known for its cars, owns many historical Italian brands such as Ferrari, Lancia, Alfa Romeo and Maserati, but also produces trucks and agricultural machines.

The newspaper said the switch at the top would be officially announced at a press conference at the group’s headquarters in the northwestern city of Turin at 4:00 pm.

Montezemolo, a renowned figure among Italy’s economic elite, is the president and managing director of Ferrari, and headed Italy’s powerful employers’ lobby Confindustria from 2004 to 2008.

Working with Marchionne, Montezemolo helped rescue Fiat from a series of crises and put it on a sound footing before the global economic crisis struck.

Fiat stepped in to save the then bankrupt US Chrysler group last year and Marchionne is now also the chief executive of Chrysler.

Fiat offered its small-car and clean-car technology to Chrysler in return for a stake in the group and access to its US dealer network, without laying out any cash.

The company will present its much-awaited industrial plan for the 2010-2014 period on Wednesday along with financial results for the first three months of 2010.

The company is expected to present new car models and financial objectives during a six-hour presentation in Turin.

Fiat lost €283 million ($380 million) in the last quarter of 2009 and €848 million for the full-year.