Agnelli family handed Fiat to outsider CEO Marchionne and saved the company

Fiat entered the 2000s in deep trouble: it lost €1.9B in 2003 and €1.5B in 2004, and Fiat Auto, the car division, lost €840M in 2004 while cutting 8,000 jobs since late 2002.

In June 2004, weeks after Umberto Agnelli's death, the family — which owns about 30% of Fiat — placed 28-year-old John Elkann as deputy chairman and chose Sergio Marchionne as CEO, the fifth in two years, and backed him to execute the restructuring.

Marchionne settled a put option with GM for $2B in 2005, focused the group on core brands and alliances, and Fiat Auto reported its first quarterly trading profit in almost five years in Q4 2005; the group returned to profit in 2005 and Q2 2007 pre-tax profit rose 61% to €875M.

Fiat Group returned to profit in 2005; Q2 2007 pre-tax profit rose 61% to €875M after a €1.5B net loss in 2004.

The family hired a proven turnaround executive instead of a family member.

Marchionne converted the GM put option into $2B cash that funded the restructuring.

Elkann, at 28, gave the CEO public backing, signaling stable family ownership.

Fiat focused on core car brands and alliances instead of trying to do everything.

In a succession crisis, hiring the best outsider CEO — not a family member — and backing him fully can save the firm; ownership and management are different jobs.

Marchionne went on to lead Fiat's 2009 acquisition of Chrysler, creating Fiat Chrysler Automobiles, and the Agnelli family, through Elkann, remained in control. Fiat Group's recovery proved durable: it posted profits through the 2000s until the global financial crisis hit in 2008.