Turin, Italy A lanky young man with swept-back brown locks sits before a packed audience of 250 journalists and, when their attention seems to turn elsewhere, unwraps a candy and pops it in his mouth. He fights back a shy smile.
John Elkann is just 26 and looks almost 10 years younger. But he is the likely heir to the Fiat fortune and could one day be master of a multibillion-dollar global empire that employs more than 200,000 people.
The Agnelli family, which founded the Fiat automaker, has wrapped its heir in a cloak of wealth and secrecy for years.
Yet with 81-year-old patriarch Giovanni "Gianni" Agnelli battling illness, they are lifting the edges slightly, and recently granted Elkann his first news conference, for the opening of a new Agnelli art gallery.
It's a touchy moment for Fiat: Its auto business is in grave decline and the company is under pressure to sell to General Motors.
Elkann refused to be drawn into talk about Fiat, saying the September gallery event "doesn't pertain to my professional activities."
But his professional activities are what matter.
Fiat's downward spiral
The Fiat Group, which includes Fiat Auto as well as numerous other businesses, is bailing with buckets of money to keep the carmaker afloat.
On Wednesday, it announced plans for job cuts affecting more than 8,000 workers and said it would ask Italy's government to declare a "state of crisis" at the auto unit, a necessary step to begin the cuts.
Fiat Auto, which constitutes 40 percent of Fiat Group, lost 823 million euros, or about $808 million, in the first half of this year a rate of about $4.4 million a day. This dragged down the otherwise profitable Fiat Group to a first half loss of 426 million euros, or $418 million.
Meanwhile, Fiat's share price is down from around 45 euros in 1998 to about 10 euros now. And the auto group suffering a bad reputation, tough competition and a shrinking market has been unable to turn it around.
In 2000, Fiat linked up with GM in an arrangement that gave 20 percent of the Italian company to the Detroit giant, and gave Fiat the option to force the U.S. company to buy the remaining 80 percent between 2004 and 2009. At the time it looked mutually beneficial; now many read it as an escape for Fiat.
It would be an emotionally painful decision for the Agnellis, who made their fortune on autos stubby cars like the classic, turtle-shaped Fiat 500 that was just big enough to stuff your knees into and just small enough to traverse narrow European city streets.
Italian Premier Silvio Berlusconi put it simply this year. "Many of us first kissed a girl in a Fiat 500," he said. "Fiat is in all our hearts."
Auto analysts say the market wants Fiat to unload the auto group but sees the family and Giovanni Agnelli in particular as obstacles. In a ghoulish twist, Fiat share prices have risen on reports that Agnelli could be dying and therefore would no longer be in the way of a sale.
Fait is Italy's only major carmaker, and its importance to the country is hard to overstate.
The company was founded in 1899, when the modern state of Italy was 38 years old. A former cavalry officer, Giovanni Agnelli the current patriarch's grandfather and his aristocratic pals had a lump of cash and a fine idea.
They'd heard about the horseless carriage and dreamed of transforming steel and rubber into driving machines and mountains of money. With about $400, they started the Fabbrica Italiana di Automobili Torino, Fiat of Turin.
Through the dictatorship of Benito Mussolini, the Second World War, the postwar boom, the birth of the European Union, Fiat has been Italy's leading business and the Agnellis its royal family, as prominent as the Kennedys in America.
Fiat also meant jobs for entire generations of Italian families, drawing epic migrations of workers from the poorer south to Turin in the northwest. Even those who didn't work for Fiat likely owned one of their cars at some point.
Fiat Group which includes among its brands Lancia, Maserati, Alfa Romeo and Ferrari moved beyond motors, too. They hold significant or controlling shares in Italy's most successful soccer team, Juventus; top daily newspapers Corriere della Sera of Milan and La Stampa of Turin; Club Med vacations; the Rinascente department stores; the San Paolo bank; as well as insurance and energy businesses. Many of these enterprises have been highly successful.
Trade barriers once kept Fiat safe in its core Italian market. Just a decade ago, about one out of every two cars on Italian streets was a Fiat. Now, it's less than one out of three.
GM-owned brands Opel and Vauxhall, European competitors such as Volkswagen, Peugeot and Citroen as well as Japanese automakers such as Toyota and Nissan have cut into the traditional market of Fiat, which is Italy's only major carmaker.
The Fiat brand has lost appeal across Europe, failing to snag consumers with new models and saddled with a reputation for frequent repair. According to one joke in circulation "Fiat" should stand for what owners tell the mechanic: "Fix It Again, Tony."
"The perception of quality is still weak," Fiat spokesman Gualberto Ranieri acknowledged. "Although Fiat has improved its quality standards, the perception from the man or woman in the street is still behind the reality."
Attempts in the 1990s to snag growing markets in Brazil, Argentina, Poland and Turkey turned into disasters when those countries's economies became distressed.
"God!" exclaimed Salomon Smith Barney analyst John Lawson, "Argentina, Brazil, Turkey I mean if you'd picked a bunch of the worst performing automotive markets globally, you would have chosen some of Fiat's markets."
Fiat's gross debt is about $32 billion. Figuring in assets, the figure drops to $5.7 billion.
Across Western Europe, this has been a rough year for carmakers. But nowhere has the drop been more precipitous than in Italy, and no auto group has lost out more than Fiat.
The Agnellis' personal wealth has been hit hard. Their two holding companies, IFIL and IFI, own about 30 percent of Fiat Group. In 2000, Forbes magazine estimated their fortune at $5 billion; today it is about $2.3 billion.
With money washing away under the old generation, the importance of young blood becomes more clear.
Preparing the heir
Yet Elkann, the son of Giovanni Agnelli's daughter Margherita and her former husband, writer Alain Elkann, is little known to the public. And Fiat is keeping it that way for now, blocking interview requests, and whisking him away when the media gets near.
What is known is that he has been built for Fiat.
Born in New York, Elkann studied engineering in Turin and was sent to work anonymously on a Fiat assembly line in Poland, a Fiat dealership in France, and a Fiat-owned headlight factory in England. He also did a white-collar stint at General Electric's audit department, and became a member of the Fiat board of directors at 22.
He wasn't always intended to take such a big role in Fiat, however. The expected heir was a nephew of Giovanni Agnelli, but in 1997 Giovanni Alberto Agnelli died at 33 of cancer. It was then that Giovanni Agnelli began looking around the family for a new successor, and fixed on Elkann.
Agnelli was once known as a Euro-playboy, mixing with aristocrats, movie stars, and world figures such as former U.S. Secretary of State Henry Kissinger. Elkann has no such reputation, keeping clear of the paparazzi and presenting the image of a studious, determined young man who has immersed himself in the world of business rather than that of showgirls and indulgence.
No matter how capable he may be, the question remains whether family influence best serves Fiat.
Fiat spokesman Ranieri argued that having the Agnellis around is an advantage: They have the patience for necessary but slow reforms, whereas stockholders want constant profit, he said.
The company is trying to turn matters around, appointing new management earlier this year, and taking a $2.9 billion loan from a pool of banks in exchange for a promise to trim its debt.
To raise money, Fiat took the step of selling 34 percent of one of its jewels, Ferrari, earlier this year. If GM buys the remainder of Fiat Auto, it also would take the Lancia and Alfa Romeo brands though not Ferrari or Maserati, which wouldn't be part of the deal.
As for GM, it is keeping out of Fiat's troubles, and wouldn't say much about young Elkann.
"They still have a company to run in the way they see fit," said GM spokeswoman Toni Simonetti from New York. "We really don't get involved in how Fiat SpA is organizing itself."