Fiat Names Former VW Exec Demel as CEO of Auto Business

MILAN October 8, 2003; Brian Lagrotteria, Dow Jones reported that Fiat SpA confirmed Wednesday that it has hired former Volkswagen AG executive Herbert Demel as the new chief executive of Fiat Auto.

Earlier Wednesday, The Wall Street Journal cited a person close to the situation as saying Fiat was set to appoint Mr. Demel as the head of its automotive unit.

Mr. Demel, who will take over at Fiat Auto on Nov. 15, is faced with the task of bringing the unprofitable car maker to profit by 2006. He replaces Giancarlo Boschetti, who will leave Fiat after nearly 40 years with the company. Fiat transferred Mr. Boschetti to Fiat Auto from truck unit Iveco in late 2001 to help cut costs at the unit, which at the time was losing around 120 million euros ($141.2 million) a month.

Such losses brought Fiat to a record a loss of 3.9 billion euros after minorities last year, with the vast majority of the losses stemming from Fiat Auto.

The company unveiled a 19.5-billion-euro investment plan in June, seeking to lift the car maker out of what may be its worst crisis in its 104-year history.

Mr. Demel previously worked for 12 years at Volkswagen's Audi unit and Brazilian operations, and for the past year at Magna International's car-components unit Magna Steyr.

Mr. Demel is among a group of new executives that Fiat is hiring to help lead the turnaround. In addition to Fiat Chief Executive Giuseppe Morchio, who took over earlier in the year as the fourth CEO in less than 12 months, Fiat recently poached Jose Maria Alapont from car-components maker Delphi Corp. to lead its Iveco business.