Crisis Management
FIAT
The Italian automobile company FIAT is synonomous with success, with brands such as
Ferrari, Maseratti, Alfa Romeo and the FIAT brand, one usually thinks of class and success
when the brand is mentioned. By and large the FIAT brand has been suuccesful for over
one hundred years, the groups activities were primarily focused on the industrial
manufacturing of cars, industrial and agricultural machinery. With time the group has
diversified into other fields, and it now has activities in a broad range of sectors in industry
and financial services. It is Italys largest industrial concern. It also has significant global
interests, operating in 61 countries with 1,063 companies that employ over 223,000
people, 111,000 of these employees are outside Italy. However in recent years the company
has fallen on hard times. Faced with a multitude of threats including, rising steel prices,
increased competitveness from Japanese and Korean manufactureres and a strong Euro,
FIAT endured heavy losses in sales and turnover since 2001. The company lost 445 million
euros in 2001 and just over 820 million euros in the first half of 2002, not to mention sales
in Europe and Italy falling by roughly twenty percent and the FIAT factories operating at
only seventy per cent of its maximum capacity. Furthermore chances of a recovery through
the Latin American markets were scuppered due to the financial crises there. However a
management overhaul, large scale redundancies and the release of many new cars on the
market has helped FIAT to drag itself out of a deep crisis that was so significant it brought
a large scale downturn in the Italian economy.
COMPANY HISTORY
FIAT was founded on the eleventh of July 1899 at Palazzo Bricherasio in Turin and the
company charter of Societа Anonima Fabbrica Italiana Automobili Torino was agreed and
signed. The company was founded by a group of investors who became the board of
directors. On the board of directors, Giovanni Agnelli was recognised as a potential
chairman and because of his determination and strategic vision he was in 1902 made the
Managing Director of the company.The first FIAT factory was opened in 1900 near the
Italian town Corso Dante. One hundred and fifty workers were employed there and the
factory produced 24 cars. FIAT quickly began entering motor racing competitions, and did
so with great success, thus creating and enhancing the FIAT name. FIATs reputation was
such that in 1908 FIAT heade towards the promising American market, in that year FIAT
