All In The Family

It's not the fine-dining experience you might expect an Agnelli would prefer. The anointed heir to Italy's greatest industrial fortune is settling into his chair at Vittoria, a homespun Turin trattoria where plates clank every time the nearby kitchen door swings open. But for John Elkann, the 30-year-old vice chairman of both Fiat and IFIL, the Agnelli family's €6 billion holding company, this is the perfect place for a power lunch. After ordering his favorite Vittoria dish — a lightly fried veal cutlet with fresh tomatoes — Elkann leans in to better explain his choice. "You know why I really like this place?" he says, lowering his voice and widening his eyes. "Because it's fast."

Those are the words of a young man on the move. It's been nine years since he was handpicked by his grandfather, Giovanni "Gianni" Agnelli, to be next in line to take the reins of the family's automotive and financial empire. And while Fiat's fortunes have rollercoastered, Elkann has been methodically groomed into what many hope will be one of Europe's top business leaders for decades to come. Guiding an entrenched business dynasty in a competitive global marketplace is a tall order for the tall executive, a lofty 1.9 m though still baby-faced. "He is now the point of reference for what is quite a sprawling family empire," explains Giuseppe Berta, professor of economic history at Milan's Bocconi University, and author of the recent book, The Fiat After Fiat. "This is a delicate moment. Elkann is still rather young, and there are some conflicting ideas within the family about their holdings. But he is the only one who can lead them into the future."

Of course, the prize is not yet Elkann's. While both his decision-making role and public presence have recently begun to swell, Fiat chairman Luca di Montezemolo and ceo Sergio Marchionne are still largely in charge. The Fiat Group, which counts CNH tractors and Iveco trucks among its holdings, has been buoyed recently by strong numbers from its once-suffering automobile division. Under the turnaround leadership of Marchionne, in the first five months of the year, European sales of the auto group (which includes the Fiat, Lancia and Alfa Romeo brands) jumped 23.2% over 2005 numbers, to around 520,000 units, representing nearly half of overall company revenues. And that's at a time when economic uncertainty has many Europeans putting off major purchases such as cars.

With Fiat now rolling toward recovery — and his increasingly central role both in the holding company's day-to-day management and the dynasty's long-term destiny — Elkann decided to give his first-ever extensive interview. Over the course of several encounters in Turin and Rome, he spoke with Time about his rapid rise in Italy's leading business family, Fiat's struggle to adapt to a shifting global playing field, and a young man's relationship with his famous silver-haired grandfather.

The death of this formidable figure and of Gianni's younger brother Umberto Agnelli, both from cancer within a 16-month span, created the vacuum that forced Elkann — the eldest child of Gianni Agnelli's daughter Margherita and French-Italian writer Alain Elkann — to step to the fore ahead of schedule. He did so amid the company's two-year crisis that came, in 2002, from weak management and damaged brand image, and forced a €3 billion bank bailout to stave off potential bankruptcy. "If the situation had been different, I might have had more time to ease into the job. But I was forced into the middle of a bad moment," Elkann says. "The company was being mismanaged. The family leadership was aging and sick.The financial community didn't support us anymore. At that point, you have the choice to let it go or you try to fix it."