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Fiat restructuring to undermine Ferrari bosses?

THE recent rumors in Italy suggesting that Fiat is planning to take a much more prominent role in the running of Ferrari may not be far from the truth.

Although it is Italy's biggest private business, the Fiat empire recorded its worst ever losses in 1993. Since then, Fiat chief executive Cesare Romiti has been busy restructuring the vast company, selling off subsidiaries and investing the money in new production facilities and product lines. This has involved much greater cost-control.

There has also been an important shift in the power structures of the Fiat empire with a new nine-member board reducing the decision-making influence of the Agnelli family, despite the fact that they still own 32% of the shares.

We believe that as part of this restructuring, a new organization called Fiat Corse is to be established, to coordinate the motor sporting activities of the Fiat empire, which includes the Alfa Romeo, Ferrari, Fiat, Innocenti, Lancia and Maserati companies.

Since Fiat bought Alfa Romeo in 1986, it has adhered to the policy of having Ferrari in F1, Lancia in rallying and Alfa Romeo in touring car racing. After 10 years that looks like changing with all programs being dropped except F1 and Alfa Romeo's German Touring Car Championship challenge.

We hear that Fiat Corse will be headed by Giorgio Pianta, who is currently in charge of Alfa's racing program, with Pierguido╩Castelli taking on the role of technical coordinator. The organization will be based in the old Autodelta headquarters at Settimo Milanese, to the east of Milan.

These plans are likely to cause problems for the current Ferrari management, which has been investing vast sums of Fiat money to make the team competitive: luring Michael Schumacher to Maranello for a rumored $25 million; poaching Eddie╩Irvine from Jordan for $8 million; paying several million a year to adviser Niki Lauda and having simultaneous V10 and V12 engine programs - not to mention a V8 design study last year.

Ferrari sporting director Jean Todt has constantly denied that Ferrari is spending more in F1 than the other teams but Fiat, clearly, is not convinced and wants to have more control on the expenditure.

Montezemolo was nominated as Ferrari president by Fiat boss Gianni Agnelli back in November 1991, but the power politics within Fiat appear to have weakened his position, and the involvement of Castelli is bad news because Castelli was one of the old Ferrari management - technical director between 1988 and 1991 - which was booted out when Montezemolo took power.

It may also be bad news for John Barnard's Ferrari Design & Development in Shalford, England. Barnard was hired by Montezemolo in August 1992 but insisted on having his own design center in England, which is quasi-independent from other Ferrari activities at Maranello.

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