Fiat Patriarch Gianni Agnelli Dies at 81

Gianni Agnelli, one of Italy's most powerful businessmen who turned the family car company Fiat into a global industrial giant, has died aged 81, his family said today.

Agnelli, Fiat's honourary chairman, had been suffering ill health and last year went to the United States for treatment for prostate cancer.

His death came as members of the Agnelli clan gathered for a meeting at which they planned to discuss the worst crisis in their century-old stewardship of a company whose cars were a symbol of Italy's post-war industrial miracle.

Members of the family held only a brief meeting Friday morning following the announcement of the death of one of the country's most respected figures.

"Giovanni Agnelli died in his house in Turin after months of illness," the Agnelli family said in a short statement, using his full first name.

The political world was quick to pay tribute to the silver-haired Fiat patriarch, a man whose influence extended into almost every corner of Italian life, spanning business, politics and sport.

"A great Italian has died. He was the head of the country's largest group and a man who played a large part in the life of the institutions who are also mourning his loss," said Communications Minister Maurizio Gasparri said.

Fiat is facing a crisis after sales at its car arm Fiat Auto have tumbled, pushing the whole group into loss and raising concerns about its debt.

Fiat shares - which in December slumped to nearly 20-year lows - were up about five percent in early trade Friday after the announcement.

Last year rumours of Agnelli's death periodically pushed up Fiat's share price on expectations that without him Fiat would be more likely to sell its loss-making car unit to U.S. partner General Motors Corp.

"His death means we have a completely different situation. It is now an open question what will happen to Fiat Auto because he was the man perceived as wanting to hold on to it," said a car sector analyst in Germany.

Fiat sold a 20 percent stake in Fiat Auto to GM in 2000 and the group has an option to sell GM the rest from 2004. However, there has been speculation recently that Fiat might drop that option in return for a cash contribution from GM for a recapitalisation.

Once a Flamboyant Playboy

Agnelli, whose grandfather founded the company in 1899, became Fiat managing director in 1963 and chairman in 1966, a post he filled for 30 years.

Gianni's younger brother Umberto has recently been tipped as a new chairman of Fiat as the family tries to keep the reins of the nation's biggest private sector employer despite the increasing influence of creditor banks and pressure from the government.

Once a flamboyant playboy and dashing companion to some of the world's most beautiful women, Gianni later turned his mind to business and held the post of chairman of the Turin-based group for 30 years until he formally stepped down in 1996.

Under his leadership, Fiat added to its car empire by buying luxury carmakers Lancia, Maserati, Alfa Romeo and Ferrari. It diversified widely into areas such as aerospace, power and telecommunications to varying degrees of success.

Agnelli's influence extended to the corridors of power in Rome where he was courted by politicians.

In 1991 he was made a life senator in honor of his role in developing Italy's economy - Europe's fourth largest - and acting as an anchor at times of political turbulence. After retiring, Agnelli remained influential as honourary chairman, resisting the sale of Fiat's car business to GM amid slumping sales and growing losses.

Despite its troubles, the Fiat group still accounts for nearly five percent of Italy's entire economy.