Fiat names board of directors member Sergio Marchionne as its new CEO

ROME (AP) _ Struggling automaker Fiat named board member Sergio Marchionne as its new chief executive Tuesday, days after the sudden resignation of Giuseppe Morchio. <br/><br/>The appointment during a

Tuesday, June 1st 2004, 10:58 am

By: News On 6

ROME (AP) _ Struggling automaker Fiat named board member Sergio Marchionne as its new chief executive Tuesday, days after the sudden resignation of Giuseppe Morchio.

The appointment during a board of directors meeting at the company's headquarters in Turin makes Marchionne Fiat's fifth CEO in two years. The swift decision by Fiat was also aimed at restoring confidence in the company's restructuring efforts after the death last week of chairman Umberto Agnelli and Morchio's resignation.

Marchionne, an Italian-Canadian who has been an independent member of Fiat's board of directors since 2003, is the chief executive of Switzerland-based goods inspection and testing company SGS.

``Fiat has had problems and it still does,'' Marchionne said in his first remarks as CEO following the board meeting. But, he added, ``Fiat will make it and will be again what it always has been.''

Analysts said Marchionne has a reputation of being an aggressive executive and a turnaround expert. ``He gets things done,'' David Loggia, fund manager at Carmignac Gestion in Paris, said before the appointment was announced.

Shares in Fiat opened up 2.7 percent on the Milan stock exchange amid speculation Marchionne would be named, and by mid morning it was up 3.7 percent. On Monday, the company's stock closed down 1 percent, after losing more than 3 percent during the session.

Morchio stepped down Sunday to protest the choice of Ferrari chief and longtime Agnellis' friend Luca Cordero di Montezemolo as Fiat's new chairman. Morchio himself had been cited as possible candidate for the job, and he reportedly wanted a bigger role in the company.

Morchio was largely credited with devising a restructuring plan that is helping Fiat pull out of its worst financial crisis ever.

Fiat Group _ Italy's largest private employer _ has narrowed its losses significantly in the first quarter of this year, but executives have said that much more needs to be done to improve the group's financial health.

In 2002, the Fiat Group's posted $3.5 billion in losses; after a year with Umberto at the helm, they had improved to $1.5 billion.

Umberto Agnelli died of cancer at age 69 on Thursday night, a little more than a year after taking over Fiat Group from his elder brother ``Gianni'' Agnelli, who died in January 2003.

Umberto Agnelli had appointed Morchio shortly after taking over.

The management shakeup of recent days also included the appointment of two young Agnellis to prominent positions _ a sign that the family that founded Fiat in 1899 wants to maintain tight control over the company.

John Elkann, a 28-year-old heir to the Agnelli empire, was made vice-chairman, while Umberto Agnelli's son, Andrea, was added to the board of directors.

``We have tried to be very quick in order to guarantee stability and continuity to Fiat's restructuring plan, which we'll bring forward,'' Elkann said Tuesday.