Fiat – Essentials
|Derivation of name||Fabbrica Italiano di Automobili Torino|
|Name meaning||Italian car manufacturer of Turin|
|Name of founder(s)||Giovanni Agnelli|
|First car name||4HP|
|First car date||1899|
|First car top speed/power||21mph / 3.5hp|
Brief History of Marque
F.I.A.T. was founded in Turin on July 12, 1899, at a time when the city was enjoying a period of vigorous industrial expansion. The first plant, inaugurated in 1900 at Corso Dante, had 35 employees and produced 24 automobiles. The Chairman was Ludovico Scarfiotti, with Emanuele Cacherano di Bricherasio serving as Vice Chairman and Giovanni Agnelli as Secretary to the Board. The other directors were Michele Ceriana, Alfonso Ferrero di Ventimiglia, Cesare Goria Gatti, Carlo Racca, Roberto Discaretti di Ruffia and Luigi Damevino.
Thanks to his determination and strategic vision, Giovanni Agnelli, a former cavalry officer, gained a prominent position among the original investors and was made Managing Director in 1902. One of his promotional ideas, a tour of Italy by automobile, was successfully carried out, with the finish line at the Milan Fair. The oval logo on a blue background designed by Carlo Biscaretti was adopted in 1904 and the first automobile to bear the Fiat brand was a Model 4 HP. The Company implemented a two-prong growth strategy – diversification of production and focus on the most promising markets – which has characterised its development through its entire one-hundred-year history.
In 1902, after listing its shares on the Stock Exchange, Fiat established a number of new companies serving specific functions: Societa Carrozzeria industriale, Fiat Brevetti and S.A. Garages Riuniti Fiat-Alberti-Storero. As a result, the Fiat factories produced not only passenger and racing automobiles, but also commercial vehicles, marine engines, trucks, trams, taxicabs and ball bearings. The Company’s approach to the market was guided by a strategic and international vision. Fiat Automobile Co. was incorporated in 1908 in the United States. It manufactured Fiat cars under license at a plant built in Poughkeepsie, New York, in 1909. Relationships established with other partners led to exports to France, Austria, Great Britain and Australia.
Ten years after its founding, Fiat had increased its capital stock to 12 million lire, had 2,500 employee and had manufactured 1,215 automobiles. The start of the First World War meant increased output of army trucks, airplanes, ambulances, machine guns and engines for submarines. However, the conversion to military production did not alter Agnelli’s vision of a great future for Fiat based primarily on automobile manufacturing. After several trips to the United States by Agnelli, Bernardino Maraini and Guido Fornaca, the Company started to plan “a great new, American-style factory”.
In 1916, construction of the Lingotto plant started at Via Nizza, in a mixed farming and protoindustrial district of Turin. Giacomo Matte Trucco was the project manager. The Lingotto factory, the largest in Europe, quickly became a symbol of Italian industry and one of Turin best-known icons. During those years, Fiat expanded its activities to the steel, railway and electrical industries, and entered the public transportation market with an exclusive contract to supply buses to SITA, a company based in Florence.
The end of the First World Ware ushered in a decade of complex and profound social changes. Fiat was not spared the turmoil and, in September 1920, its factories were taken over by the employees. In November 1920, Giovanni Agnelli was appointed Chairman of the Board of Directors and Guido Fornaca was named Managing Director. During the following two years, the Company cut costs, downsized its workforce and lowered salaries. Growth resumed in 1923, when the new Lingotto plant went on stream. The launch of the Fiat 501 was followed by the introduction of the 505, 510 and 519 models. The four-seat 509 came in 1925.
Fiat’s management understood that the Company’s future growth was largely predicated on the development of mass production in Italy, since higher production would generate better living standards, improve social conditions and increase consumer spending. With this in mind, Fiat established SAVA, a consumer credit company created to promote instalment purchases of cars. The Company’s advertising message, delivered through posters, newspapers and corporate publications, succeeded at targeting women as potential buyers of new cars.
Fiat’s victories in automobile races, including the crossing of the Sahara and the raids in Latin America, significantly increased interest for this new mode of transportation. During those years, the Company founded the Fiat Employee Health Services, the Central School for Fiat Apprentices and several other employee organisations, including the Fiat Sports Group, the Alpine Children Resort and the Employee Association. Adjusting to changing social conditions, these entities have been and continue to be a constant reference point in the Company’s life. The number of investments in Italian and foreign companies continued to increase. Management of this complex portfolio was entrusted to the newly created IFI (Istituto Finanziario Industriale). A plan to construct a factory that would build automobiles and trucks in Moscow under Fiat license had been on the drawing boards since 1913 and the plant went on stream in 1924.
Mussolini’s decision to follow a policy of autarchy forced the Company to scale back its internationalisation plans and focus on the domestic market. The 30’s were characterised by remarkable technological development for trusts and other commercial vehicles, some of which began to be equipped with diesel engines, and by growth for the Groups’ activities in the fields of aviation and railway products. The world’s first self-propelled electric and diesel trains manufactured using an assembly line system were produced for the Italian State Railways.
In 1928, Vittorio Valletta was appointed General Manager of Fiat. In 1935, Senator Giovanni Agnelli suffered the loss of his son Edoardo. In 1934, Fiat designed the 508, a new economy car known as the Balilla and referred to as “Minimum Rate”, because of its low fuel consumption of eight litres for every 100 kilometres. The Company produced 113,000 of these cars. It also introduced a sports version (the 508 S) and a four-gear model (71.000 units). 1936 saw the launch of the Fiat 500 Topolino. This car, designed by Dant Giacosa was the world’s smallest economy car. It remained in production until 1955 and a total of 510,000 units were manufactured. In 1937, Fiat reaffirmed its commitment to mass production by starting construction of the Mirafiori plant in Turin. This facility, which was inaugurated on May 15, 1939, enabled the Company to introduce in Italy the most sophisticated models of industrial organisation. It was designed to accommodate 22,000 workers in to shifts, a truly remarkable number considering that, at that time, Fiat had a total of about 50,000 employees.
Outside Italy, customer assistance centres, workshops and special industrial projects were created in Spain, Egypt, Poland and France. The Second World Ware caused a drastic drop in the production of automobiles, but the output of commercial vehicles increased fivefold. Carpet-bombing raids seriously damaged the Fiat factories, but failed to halt production. During the war and its aftermath, employee services provided directly by Fiat supplemented the limited assistance offered by the Public Administration. The Company’s Assistance Office provided linen, shoes and firewood to working people, while Fiat soup kitchens distributed on hundred thousand meals a day. Senator Giovanni Agnelli died in 1945 and in March 1946 Vittorio Valletta became Chairman of Fiat.
Matching U.S. technology and developing an Italian way to mass motor transport was the task at hand for Fiat. By 1948, thanks to financial provided by the Marshall Plan, the factories had been rebuilt. The payroll increased from 55,674 to 66,365 employees. Earnings, which had remained flat during the war, had disappeared after 1943. In 1946, the Company reported a loss. However, the upward trend resumed in 1948. As manufacturing output recovered after the war, the Company introduced the Fiat 500 B, available as a sedan or as a station wagon, the 1100E and 1500E models and the Fiat 1400, a car with unitised body construction characterised by innovative styling and engineering. The 500C was offered for the first time with a heating and ventilation system installed as standard equipment. The first cars equipped with a diesel engine came off the assembly line in 1953.
In the meantime, research continued on marine and aircraft engines. The G 80, Italy’s first jet aircraft, was produced in 1951 and the Company broke new ground with the prototype of a turbine-powered car wand with its work in the field of nuclear technology. In 1956, the Fiat G 91 was chosen for production as a NATO tactical fighter.
The Fiat 600, a new economy car, was introduced in 1955. Over four million units of this model were manufactured. The colourful parade of 600s that ran through the streets of Turin to publicise the model launch provided a fitting symbol for the start of mass motor transportation in Italy. The New 500 was introduced two years later. It enjoyed a production run of 3,678,000 units. During the 50’s, the Company’s workforce increased from 70,000 to 80,000 employees and production rose from 70,800 cars in 1949 to 339,300 in 1958. Between 1956 and 1958, the Mirafiori plant doubled in size and by the end of the 60’s it employed over 50,000 people. At the same time, expanded its production of farm tractors and construction equipment.
Outside Italy, new factories were built in South Africa, Turkey, Yugoslavia, Argentina and Mexico. Fiat’s engineering and construction activities, which were headed by Impresit, expanded rapidly in the international markets, completing such landmark projects as Kariba hydroelectric power plant on the Zambesi, the Dex Dam, in Iran, and the Roiseires Dam on the Blue Nile, in Sudan. They also helped save the Abu Simbel temples in Egypt and built the Grand San Bernard highway tunnel. This was the time of Italy’s “economic miracle”. From 1958 to 1963, the country’s gross domestic product grew at an annual rate of 6.3% and the automobile industry was the main force driving the expansion.
During the decade between 1959 and 1968, Fiat’s output rose from 425,000 to 1,751,400 cars, while car density improved from 96 to 28 inhabitants for every car. Exports also boomed, jumping from 207,049 to 521,534 units. Gains were recorded in the production of commercial vehicles and tractors, which increased from 18.968 to 68.200 and from 22,637 to 52,735 respectively. The Group’s workforce doubled from 85,117 to 158,445, with the number of factory workers rising at a faster rate than the office staff.
The Fiat 850, a new and highly successful economy car, was introduced in 1964. Other, more powerful models followed: the 124 and the 125, which in 1968 were emblazoned with the diamond-shaped Fiat logo still in use today. In 1966, Giovanni Agnelli, the founder’s grandson, became Chairman of the Company’s Board of Directors. In 1969, Fiat decided to expand its presence in this Southern Italy, where it already owned factories in Reggio Calabra, Bar and Naples. It therefore launched the construction of car-making plants at Termini Imerese, Cassino and Termoli, and facilities for special productions at Sulmona, Lecce, Brindisi and Vasto. The economic expansion was followed by a long period of social adjustments. During 1969, the confrontation between corporations and their employees reached a high point, with a total of 15 million hours lost to strikes. This period of confrontation had a significant negative impact on corporate profitability.
In 1971, Fiat launched the 127, its first front-wheel drive model, which featured innovative technology. It was extremely well received by the market and by the end of 1974 one million 127s had rolled off the assembly line. The Company responded to the oil crisis by taking advantage of technological innovations to accelerate the introduction of automation at its manufacturing facilities. By 1972, the first 16 robots were already in operation at Mirafiori on the Model 132 assembly line. Other robots went into service at the Cassino plant in 1974. In 1978, Robogate, a new robotised, flexible bodywork assembly system was installed at the Rivalta and Cassino factories. It had been developed by Comau, which would become the world leader in its industry.
In 1978, Lancia S.p.A. was merged with and absorbed by Fiat S.p.A. However, the Lancia brand continued to be used for marketing purposes. In 1979, the Automobile Sector was transformed into a separate company that combined the Fiat, Lancia, Autobianchi, Abarth and Ferrari brands, with Giovanni Agnelli as its Chairman. The Group had already acquired the prestigious Ferrari brand in 1969, when it purchased a 50% interest in that company, later raised to 87%. At the end of the 70’s, the Fiat Group strengthened its organisation adopting a holding company model. The various manufacturing units, which during the long period when Valletta was at the helm had been structured as divisions. Became independent companies organised into operating Sectors. In addition to Fiat’s traditional activities in automobiles, rolling stock, aviation, tractors and commercial vehicles, companies like Fiat Engineering, Comau, Teksid, Magneti Marelli and Telettra were also set up as independent entities. In 1980, Cesare Romiti, who had joined Fiat as Chief Financial Officer in 1974, was appointed Chief Executive Officer of the Fiat Group.
During this period, Fiat Ferroviaria and Iveco enjoyed exceptional growth. Fiat Ferroviaria developed sophisticated technologies for the construction of tilting, independent-wheel railway bogeys, which will later enable it to build the Pendolino, a high-speed train for which it received important orders from customers in many European countries. Iveco became the international brand for the Group’s commercial vehicles. Created in 1974, the Iveco brand replaced the Fiat, OM, Lancia, Magirus and Unic brands. After 1991, Pegaso, a Spanish brand, was also replaced with Iveco.
In 1983, the Uno, the automobile that symbolised the renewal of Fiat Auto, was unveiled at Cape Canaveral. This car, which featured radical innovations in electronics, in the use of alternative materials and in engine technology, with the adoption of the Fire 1000 clean powerplant, enjoyed a production run totalling 6,272,796 units. The following year Fiat Auto S.p.A. acquired Alfa Romeo S.p.A and its affiliates. In 1993, it added the prestigious Maserati sports cars, completing its current roster of automobile brands. The company continued to enter into numerous international agreements for the manufacturer of Fiat products under license and to expand its portfolio of investments, with special emphasis on industrial activities in the areas of telecommunications and components. In this field, through a series of acquisition and divestitures, the Group created a new organisation. By 1987, Magneti Marelli had become an industrial holding company that controlled and supervised over 60 companies throughout the world. The growing importance of electronics pushed component manufacturers to the forefront in the development of personal mobility alternatives.
In 1989, the international press named the Fiat Tipo “Car of the Year” because of its innovative characteristics. With changing values came a new perception of the function of the automobile and the maturing of the industrial society brought new urgency to environmental concerns. Fiat addressed these issues by development a program for the recovery and total recycling of cars ready for demolition. In 1991, constructions of two new plants got under way at Pratola Serra and Melfi. These facilities, which went on stream in 1994, embodied a revolutionary approach to industrial production methods.
The Fiat Group responded to the crisis of the early 90’s by expanding its international presence (exports came to account for more than 60%) of revenues), carrying out a major capital increase, making massive investments in innovation and implementing incisive cost cutting measures and a drastic restructuring program. On February 28, 1996, Giovanni Agnelli was named Honorary Chairman of the Fiat Group and Cesare Romiti took over as Chairman of the Board of Directors, a post he was to hold until 1998, when Paolo Fresco took the helm. Paolo Cantarella was appointed Chief Executive Officer. During this period, Fiat introduced the Punto, an innovative car conceived as a European automobile. In 1995, the Punto was named “Car of the Year”. In 1998, the Panda reached its eighteenth year of production, ranking as one of the most enduring car models. In September 1997, Fiat S.p.A., the Group’s parent company, started the process of closing its offices at Corso Marconi and moving its operations to the Fiat Building at the Lingotto Complex, which had been transformed into a trade-show and convention centre.
At the end of the 90’s, competition grew increasingly fierce in the Western markets. As products manufactured in Southeast Asia flooded Europe, Fiat responded by emphasising its traditional strategy and focusing on emerging markets. The Group expanded its factories in Brazil and Argentina and introduced the Palio, a world car designed so that it could be easily reconfigured to meet the needs of different users and markets. Fiat quickly became the largest carmaker in Brazil, Argentina, Poland and Turkey. In 1991, the Construction Equipment Sector expanded its international presence by acquiring the tractor and agricultural equipment operations of the Ford Motor Company and adopted the New Holland brand. In 1993, it concluded an agreement with Hitachi Co. Machinery Ltd. and expanded its existing joint ventures, becoming one of the world’s largest producers, with about 20% of the global market.
Iveco strengthened its leadership position I Europe, enhanced its product range with the introduction of the EuroTech, EuroStar and EuroCargo lines and established joint ventures and manufacturing units in India and China that produce Daily light commercial vehicles. On the eve of the new millennium, the Fiat Group is proud of its achievements as an Italian and global industrial enterprise, with a powerful position in the world markets and a tradition of expertise and innovation developed in the course of its one hundred-year history.
Article reproduced courtesy of FIAT