Fiat said to tap Elkann as chairman, revive auto unit spinoff

Fiat may tap Agnelli family member John Elkann as chairman as it revives a plan to spin off the auto-making division, according to people familiar with the matter.

Fiat is set to name Elkann, 34, to the top post on Tuesday, according to two people with knowledge of the company’s plans, who asked not to be identified because it has not been announced. Chairman Luca Cordero di Montezemolo stepped down earlier Tuesday and will remain a Fiat director, Fiat said.

Elkann, the grandson of former Chairman Giovanni Agnelli, will take over as Turin-based Fiat reorganizes its automotive and truckmaking businesses, said the people. A separation of the auto manufacturing operations, which generated 56 percent of revenue last year, would give Chief Executive Sergio Marchionne an entity to facilitate future alliances, and a share sale would generate cash for expansion.

Fiat, which acquired a 20 percent stake in Chrysler in June, helping the third-largest U.S. carmaker emerge from bankruptcy, had sought to further expand its auto business, unsuccessfully bidding last year to buy General Motors Co.’s Opel unit in Germany.

Elkann, a native New Yorker who was raised in the U.K., Brazil, France and Italy, is vice chairman of Fiat and chairman of the Agnelli family holding company Exor SpA, which controls 30 percent of Fiat. He was designated by his grandfather to succeed him as the leader of the family’s businesses.