With the Grace of Grandpa

By Jeff Israely/Rome

Just after Fiat chief Gianni Agnelli died last January, the world got a rare glimpse of the company's heir apparent. John Elkann--the grandson Agnelli had handpicked six years earlier as his eventual successor--cut a striking figure at the wake in Turin, reminding many of the young Agnelli's poise and elegance. For now, Gianni's brother Umberto Agnelli, 69, controls Fiat Corp. But Elkann, 27, has become the man to watch.

Elkann is committed to the company. While getting his engineering degree at Turin's Politecnico University, he would sneak off for incognito stints at Fiat operations: a headlight plant in England, a production line in Poland. He continues to plug away in obscurity, and has declined to answer press queries about the future. Questions in the past were related to the tragic circumstances of Elkann's rise. Originally, his cousin Giovanni Alberto Agnelli had been tapped, but he died of cancer in 1997. Three years later, Gianni's son Edoardo committed suicide.

Elkann's duties now are centered at the company's investment group, IFIL, which has broadened its holdings to include banking, retail and ownership of Turin's soccer team, Juventus. But the core of the business is still cars, and that is where Elkann's mettle will be tested. Fiat saw its share of the Italian auto market fall from 60% to 39% in the late 1990s, before striking a stock-swap deal with General Motors in 2000. Fiat needs to reaffirm the brand at home and expand abroad. That was perhaps Gianni Agnelli's greatest achievement--and could be Elkann's greatest challenge. --By Jeff Israely/Rome