Fiat Auto: The Italian Giant in Trouble

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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

Case Details:


Case Code : BSTR050 For delivery in electronic format: Rs. 400;
For delivery through courier (within India): Rs. 400 + Rs. 25 for Shipping & Handling Charges


Corporate Restructuring
Case Length : 15 Pages
Period : 1990 - 2003
Organization : Fiat Auto
Pub Date : 2003
Teaching Note : Not Available
Countries : Italy
Industry : Automobiles & Automotive


The case examines the problems faced by the Italy-based Fiat Auto, the flagship company of the Fiat Group (Fiat). Fiat diversified into various related and unrelated businesses and expanded its operations across the world through the years. Some of these expansion and diversification moves were not successful and resulted in huge debts for the group.

As a result, Fiat Auto's financial condition deteriorated, forcing it to announce lay-offs and divest some of its businesses. Such moves led to employee agitation against the group. Fiat's financial crisis and its labor problems attracted government intervention, which further complicated matters for the group.

The case examines how poor management, internal conflicts in the company and political intervention in the company's management, brought one of the most honored and reputed companies in the world to a sorry state. The case also takes a look at Fiat's future prospects in light of increased competition and the measures being taken to restructure the company.


To gain insight into the devastating impact of the external environment on the performance of a multinational company

To understand the importance of diversification strategies and their impact on the overall performance and survival of a leader


  Page No.
Facing Rough Weather 1
Background Note 2
The Fall of Fiat: Detailing the Problems 3
Setting Things Right 5
The Future 9
Exhibits 11


Problems, Italy, Fiat Auto, Fiat Group, operations, world, huge debts, group, financial condition, deteriorated, lay-offs, divest, businesses, employee agitation, labor problems, government intervention, poor management, internal conflicts, political intervention, honored, future prospects, increased competition

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