Giuseppe Morchio, a former Pirelli executive, will be named CEO of Fiat SpA at a Friday board meeting. Umberto Agnelli, who will replace Paolo FRESCO as Fiat’s chairman at the meeting, will appoint Morchio.
Agnelli will also appoint Luca Cordero di Montezemolo, chairman of Ferrari, the sports car maker 56 percent owned by Fiat, to the board.
Fiat’s current CEO, Alessandro Barberis, will be nominated as the next vice president, while current Fiat Vice President Franzo Grande Stevens will remain on Fiat’s board.
Fiat said current Fiat directors Fresco; former General Electric Co. Chairman John F. Welch; and Felix G. Rohatyn, formerly a Lazard banker and US Ambassador to France will vacate the board seats for Morchio, Barberis and Di Montezemolo.
The new appointments are being seen as part of the new Agnelli regime’s consolidation and preparation for the big rescue plan and cash injection to be agreed with Fiat’s creditor banks.
Morchio will be Fiat Group’s fourth chief executive in less than nine months.
Barberis’ appointment as vice president will allow some continuity in the company’s ongoing negotiations with General Motors.
Reports in the Italian media say that Fiat has agreed with creditor banks to carry out a capital injection – rights issue – of up to three billion euros as part of the company’s rescue plan for its ailing car division, Fiat Auto.
However, details of the rescue plan have yet to be confirmed and sources report that Fiat may still be interested in gaining cash from GM in return for cancelling the 2004 ‘put option’ which can force GM to take over the 80 percent of Fiat Auto that it does not own. There is also a possibility that the put option could be put back a few years in return for a smaller cash injection from GM.