Fiat Appoints Galateri as New CEO

Fiat on Thursday named Gabriele Galateri, a right hand man of its controlling Agnelli family, as a CEO, boosting its flagging share price on hopes his arrival might be a sign that the group's car unit could be sold.

In a statement, Fiat also said Chairman Paolo Fresco would continue to serve as co-CEO, a post he took over after Paolo Cantarella resigned amid a wide-sweeping restructuring and debt-cutting plan at the conglomerate.

"They've replaced an engineer (Cantarella) with someone with a strong financial background," said an analyst with Milan brokerage Rasfin who asked not to be named. "It seems a gesture towards the creditor banks who wanted more financial rigour."

Fiat stock jumped on the news of Galateri's arrival in Fiat's front seat. Before the announcement Fiat was trading higher at 12.42 euros but quickly climbed to a high of 12.58 euros, up almost five percent on the day.

"Galateri has gone down well because, above all else, he is considered close to Umberto Agnelli and his presence is being interpreted as a sign of a speeded up sale of Fiat Auto," said a trader with a Milan brokerage.

Umberto Agnelli, younger brother of family patriarch Gianni Agnelli, publicly stated recently that Fiat Auto, owners of the Ferrari marque and Formula One team, could be sold.

Galateri has worked with Fiat's founding Agnelli family since 1977 when he started a steep climb to the post of finance director at Fiat.

He left Fiat to become CEO at Agnelli holding company Ifil in 1986 just as it began to diversify out of cars by buying into the food and tourism sectors -- experience that could help as Fiat executes emergency sell-offs to cut debt.

Galateri, 55, also served as CEO of Ifil's sister holding Ifi, a post he shared with Umberto Agnelli.

As Fiat struggles to cut debt and make money as its core car sales slump, analysts say the best thing Fiat could do is to sell Fiat Auto and concentrate on more profitable business like insurance and energy.

Fiat has an option to sell its 80 percent stake in Fiat Auto from 2004 to General Motors Corp., which bought the other 20 percent in 2000.