Fiat in Turmoil as CEO Quits, New Chairman Named

Italian carmaker Fiat, still mourning the death of the last senior member of its founding Agnelli family, was plunged into turmoil on Sunday when its CEO resigned unexpectedly moments after a new chairman was named.

Italy's biggest industrial group announced Giuseppe Morchio's decision to stand down as chief executive minutes after the group appointed the head of its sportscar Ferrari unit, Luca di Montezemolo, as new chairman.

The chairman's post had been left vacant after Umberto Agnelli, 69, died of cancer on Thursday. Morchio took over as chief executive in 2003 with sweeping powers to tackle the deepest financial crisis in Fiat's 105-year history.

His shock resignation, the day after Umberto Agnelli was buried, leaves a managerial void at the top of Italy's biggest private sector employer.

Morchio had replaced about half of Fiat's top managers with hand-picked outsiders, and his departure was likely to stun investors who had given his turnaround plan cautious approval.

Fiat said John Elkann, the 27-year-old grandson of former Fiat boss Gianni Agnelli, had been named vice chairman. Umberto's son Andrea Agnelli was also named to the board.

Questions had been raised about the role at Fiat of its founding family after the loss of the two most senior Agnellis in little more than a year. Umberto's older brother Gianni died of cancer in early 2003.

Di Montezemolo, 56, is credited with building Ferrari into a sporting and financial champion. Highly respected by Italy's business and political class, he recently became head of Italian employers' federation Confindustria.

The Turin-based industrial group owns the Fiat, Ferrari, Maserati, Lancia and Alfa Romeo marques, and also makes trucks and tractors. It has interests in power generation, publishing and other sectors, with a global presence from Brazil to China.