By Stephen Wilmot and Ryan Felton

John Elkann spent much of this past week in a role that has defined much of his adult life: playing peacemaker.

The scion of Italy's famous Agnelli clan -- which spawned Fiat and controls Ferrari -- is once again trying to keep the family business from spinning out of control.

This week, Elkann's mission was to foster calm and boost spirits at Stellantis, the global automaker where he is chairman, forged from the 2021 merger of Fiat Chrysler Automobiles and Peugeot owner PSA Group. The company's chief executive officer, Carlos Tavares, resigned abruptly this past weekend after his latest cost-cutting efforts alienated employees, dealers, suppliers, politicians and finally his board amid slumping sales.

By Sunday evening, Elkann was on his way to soothe nerves from Michigan to Modena.

"We just need to do what we all know we must and can do," he told the Stellantis team in Michigan, which manages brands such as Jeep, Ram and Dodge, according to comments viewed by The Wall Street Journal. "And in a simple, calm way."

By Wednesday, Elkann was in Modena, northern Italy, where he visited luxury-car brand Maserati, part of the Fiat empire since 1989. On Friday he visited a design center Stellantis inherited from Citroën in the suburbs of Paris. That was all before attending the reopening of Notre Dame cathedral on Saturday as a guest of French President Emmanuel Macron, alongside President-elect Donald Trump.

Elkann, a great-great-grandson of Fiat founder Giovanni Agnelli, is a seasoned globe-trotter. The 48-year-old was born in New York and spent time growing up in Brazil, Britain, France for high school and Italy (he went to college in Turin). He learned to speak Portuguese, English, French and Italian.

Being the eldest son of divorced parents in an itinerant household taught him a strong sense of responsibility, Elkann said on a podcast hosted by Nicolai Tangen, the head of Norway's sovereign-wealth fund.

He was handpicked to take over the family business by his grandfather Gianni Agnelli, who was for decades Italy's richest man, famously partying with Jackie Kennedy and cycling through mistresses including Anita Ekberg and Rita Hayworth.

Elkann became Fiat's vice chairman at 28 and has since built the Agnelli family holding company Exor into a $40 billion global empire with investments ranging well beyond Stellantis, to include Ferrari, the Economist magazine and soccer team Juventus F.C.

Also at 28, he married an Italian aristocrat, Donna Lavinia Borromeo, the descendant of a centuries-old line of Milanese bankers and cardinals. They live with their three children in Turin, Fiat's hometown.

"Even though my work takes me mostly out of Italy, my wife and I decided to live in Turin: Our children were born here and were baptized here, and go to school," he told Catholic newspaper Avvenire in May. "Our roots are in Turin, a territory to which we feel connected and where we continue to strengthen our social commitment."

His domestic tranquility is a noted contrast to his younger brother Lapo, who has been a staple of Italian gossip magazines for his outlandish fashion as well as stories involving drugs, sex and fast cars. In 2005, Lapo Elkann's overdose in the apartment of a transgender sex worker made tabloid headlines around the world.

In 2016, Lapo Elkann was charged with faking his kidnapping in Manhattan to get money from the family for a drug binge. The charges were dropped, and he has since been through rehab, married and had some success as an entrepreneur. He couldn't be reached for comment.

As CEO of Exor, John Elkann has long kept his cousins happy with a rising stock price and regular dividends. Just over 100 descendants of Fiat's founding father own shares in a holding company, Giovanni Agnelli BV, which in turn owns 53% of Exor, the largest shareholder of Stellantis and Ferrari.

Family rituals, including a yearly soccer game and dinner, have also helped build cohesion.

Elkann has said he learned much from his friend and mentor Sergio Marchionne, who took over the struggling Fiat company as CEO in 2004 and masterminded the merger with Chrysler that took the business global, reviving the family fortune against the backdrop of a stagnant Italian economy.

Marchionne's unexpected death in 2018 thrust Elkann into the auto industry's spotlight as Fiat Chrysler looked for another merger partner. He initially held talks with Renault before doing the deal with PSA Group in 2021. Now, his handpicked CEO for Stellantis, Tavares, has left him with a mess to untangle.

Still, the PSA transaction helped Elkann diversify the family's investments away from the notoriously tough mainstream car industry. Exor now owns dominant stakes in Dutch medical-device company Philips and French luxury-shoemaker Louboutin, among many others.

He's taken an interest in tech and helped to found Italian Tech Week in Turin, where this September he interviewed OpenAI founder Sam Altman.

"You've been through a lot of change too and I've always admired how you handle it," Altman told Elkann.

Another mentor is Warren Buffett, with Exor in some ways modeled on Berkshire Hathaway.

"Listen and ask questions," Elkann said on the podcast, when asked for his advice for young people. It was the same advice Gianni Agnelli gave him when the family patriarch brought his young grandson into the family business in the late 1990s, he said.

Keeping harmony in the family has had some big challenges. He and his siblings are estranged from their mother, who sold her stake in the family business in 2004, when it was on the brink of collapse. She later regretted the decision and started agitating to get it back.

Elkann tried to keep the dispute under wraps, but in 2007 she filed suit.

"Unfortunately, she's decided to go public," Elkann told an associate the night before her lawsuit was filed, according to a Vanity Fair article from 2008. "Tomorrow there's a whole thing in The Wall Street Journal."

The next day, Elkann released a statement saying, "I am very hurt as a son and surprised by this private matter, which was resolved in 2004 with everyone's consent and agreement."

Elkann usually leaves others to steer the Agnelli companies, and takes the wheel only when there is a gap to fill or a fire to put out.

In 2020, when Ferrari CEO Louis Camilleri retired abruptly after a bad bout of Covid-19, Elkann took the job for more than half a year while a successor was found.

Until this week, Tavares held the limelight at Stellantis as the company's top manager, and was known for his ruthless cost-cutting.

As Stellantis's financial woes grew in the summertime, Tavares ratcheted up his pursuit of maximum efficiency. In the fall, he began holding weekly "Darwin" meetings with deputies that involved identifying extreme cost cuts that could be made across the automaker, according to people familiar with the meetings. Tavares had long compared today's auto industry to a Darwinian fight in which only the fittest would survive.

In Monday's meeting with top Stellantis managers, Elkann said he was dumping the doom-and-gloom approach.

"Darwin no longer exists because we will still exist," he said.

Elkann appointed an executive committee to help him until a new CEO is chosen in the first half of next year. He continued to preach calm -- and peace.

"Honestly guys, what we really need to do is sell cars," he said at the Michigan meeting this week. "That's what we're good at."

Write to Stephen Wilmot at stephen.wilmot@wsj.com and Ryan Felton at ryan.felton@wsj.com

(END) Dow Jones Newswires

December 06, 2024 21:00 ET (02:00 GMT)

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