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Fiat president Giovanni Agnelli whose death was announced Friday, belied his early reputation as a playboy to become one of the most ruthless and powerful businessmen in Europe.

Grandson of the Italian senator, also called Giovanni Agnelli, who founded the auto firm in 1899, Agnelli took to heart his grandfather's advice that he should enjoy life to the full while he could.

Italy's post war gossip sheets were rarely wanting for stories about the handsome, elegantly-dressed heir to the Fiat empire whose interests, he told the press, amounted to "fast cars, pretty women and the gaming tables."

A narrow escape from death in a road accident in 1952 may have concentrated his mind, as the following year he married a Neapolitan princess and settled down to the task of becoming, in effect, the uncrowned king of the republic.

Heir apparent since the death of his father Edoardo in a seaplane accident in 1935, when he was 14, Agnelli took over as Fiat's managing director in 1963 from the 81-year-old Vittorio Valetta, who had assumed a regent's role on the founder's death in 1945, and as president three years later.

Pillar of Italian economy

In passing from one Giovanni Agnelli to another, from grandfather to grandson in the purest monarchical tradition, Fiat had already become a pillar of the Italian economy, the success of its Fiat 500 and 600 models ensuring it the lion's share of the domestic market.

The company was a power to rival Rome, often compared with the medieval city-states, its sales alone accounting for five percent of Italy's gross national product and turning out annual net profits of two billion dollars.

Agnelli maintained the appurtenances of his former lifestyle, with his yachts and luxury villas, even as he guided the auto giant's fortunes.

A cult of personality developed around "l'avocatto" (the lawyer) as he exploited what his biographer Alan Friedman called "a network of feudal power" that used methods "sometimes bordering on illegality" and which "could easily be thought of as another mafia."

His early years at the helm were shaky, marked by some dubious industrial policies adopted against a background of working-class militancy, terrorist attacks and the burgeoning oil crisis, and 1973 saw the company post the first operating losses in its history.

Ghaddafi's share

Two key decisions helped to turn the tide: the appointment in 1976 of Cesare Romiti as managing director, and the controversial acceptance of a 450 million dollar injection of funds, amounting to a 10 percent shareholding, by Colonel Moeammar Ghaddafi's Libyan state.

With Romiti acting as fixer, negotiating layoffs with the unions or privileged deals with the state, Agnelli was free to cultivate his Olympian image as the planner of grand strategy.

By 1986 Fiat was again handsomely in the black, posting profits of $1.7 billion. Moeammar Ghaddafi's re-sale of his shares brought Agnelli a seven-fold profit and increased the family holding in Fiat from 33 to 40 percent.

Agnelli's authority extended throughout an increasingly diversified empire that included insurance, banking, department stores, media (including around a quarter of the daily press) and the Juventus football club inherited from his father.

However the clouds were gathering again by 1996 when Agnelli, made a life senator in 1991, reached the 75-year age limit and handed the presidency to Romiti.

Fiat sales were down from 60 percent domestic share in the late 1980s to below 45 percent, and Romiti himself was under investigation, along with eight of his close colleagues, for corruption in Italy's "clean hands" probe.

And two years later Agnelli's designated successor, his nephew "Giovannino" Agnelli, died of stomach cancer, aged 33.

In January 1998 Agnelli was forced to look outside the family for a president, bringing in Paolo Fresco, a former vice president of the US giant General Electric.

Fiat must remain in family

The patriarch remained determined however that Fiat should remain in the family after his death even in the event of alliances with other companies, saying he would make it as difficult as possible to transfer family shares.

The Agnelli financial holding company Ifil controls 30 percent of Fiat, well down on the 70 percent owned by Agnelli's grandfather in 1945.

His latter years were marked by a grim battle with cancer - never officially acknowledged by the family, which referred only to "prostate problems" - which necessitated several trips to the United States for treatment.

Though he remained honorary president of the company, he increasingly took a back seat, and had been a peripheral figure in the battle to save the loss-making Fiat Auto in recent months as the company forged a complex restructuring plan with its creditor banks. - Sapa-AFP

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