Chief of Fiat’s Auto Division Resigns

Vittorio Ghidella, credited with rescuing Fiat’s auto division from the verge of collapse, is resigning because of differences about where the division, Europe’s biggest car maker, should fit within the conglomerate.

Fiat SpA, Italy’s biggest private industrial group, said in a statement Friday that Ghidella, chief executive of the auto division for a decade, will leave by the end of the year.

Fiat Chairman Giovanni Agnelli said later that he’d “found a conflict over the interpretation of the role of Fiat Auto within the Fiat group.”

“Two Fiats do not exist but only one large group, engaged in a difficult international challenge,” he added.

According to persistent reports, Ghidella was in conflict with Fiat group Managing Director Cesare Romiti, dubbed “Il Duro” (the hard man) because of his reputation as a tough manager. The company said Friday that Romiti will be nominated at the next board meeting to take Ghidella’s place in addition to his present job.

“Romiti will not have an easy task,” Agnelli said. “Although he is taking over a healthy Fiat Auto, the future will be marked by fierce competition.”

Ghidella, 57, who was also chairman of Fiat-controlled sports car maker Ferrari, was a driving force behind the company’s climb to the top of the European car market.

“I don’t think it’s very good for Fiat. I don’t think Romiti is the proven man for Fiat cars,” said Pieter Houting, analyst at McCaughan Dyson Capel Cure in London.

“Ghidella is certainly seen as the man who turned around Fiat cars. “In the long term, they have to find someone else.”

Ghidella spearheaded development of Fiat’s Uno--Europe’s best-selling small car--and its new medium-size Tipo model, launched in early 1988 to challenge Volkswagen’s popular Golf. The Uno helped to fuel Fiat’s spectacular recovery in the 1980s from the brink of collapse in the late 1970s.