Business: A SOCIETY TRANSFORMED BY INDUSTRY

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equipment. For the second year in a row, Fiat outproduced Volkswagen (1,603,500 cars) and ranked as the biggest auto company outside the U.S. Shipments abroad of Fiats, by far Italy's biggest export item, rose in 1968 from 398,000 cars to 535,000, worth $496 million. Even in Germany, home of the Volkswagen, 1 out of 13 cars is a Fiat. Sales to the U.S. have been relatively modest because Agnelli has concentrated on exports to Europe and has only recently begun a drive to market a broader range of bigger cars in America. Still, Fiat's U.S. sales doubled.in 1968 to 31,000.

Two months ago, Fiat leaped further across national borders—and advanced the cause of European integration—by taking over France's Citroën. Agnelli personally negotiated the deal with some friends, France's tiremaking Michelin family, which controls Citroën. Agnelli sought an outright takeover, but Charles de Gaulle objected and the French government limited Fiat to a 15% holding in the firm. In fact, Fiat will get effective control of Citroen through a complex holding-company arrangement. "Have no doubts about it," Agnelli told a friend. "The merger is complete." When the Fiat-Citroën "collaboration" formally begins this month, Agnelli will, in effect, preside over a combine with total sales of $3 billion and annual production of more than 2,000,000 cars.

Agnelli is also looking to Eastern Europe, where the auto market is underdeveloped and potentially great. Tito's Yugoslavia builds Fiats under a licensing arrangement, and Poland recently signed a similar agreement to build "Polski-Fiats." Russia has hired Fiat to help it construct and run an $800 million plant at Togliattigrad on the Volga. The huge plant is scheduled to begin producing Fiats by early 1970, and work up to an annual output of 600,000. "It is hard for Italian Communists to complain about Agnelli," says Rome University Economist Paolo Sylos-Labini. "After all, if Fiat is good for Russia, why shouldn't it be good for Italy?"

Nation of Gifted Soloists

Not surprisingly, the Agnellis—Gianni and his five brothers and sisters—are often described as "not a family but an economy." When Agnelli tells people that he "looks after a few matters for my brothers and sisters," he refers to his stewardship of I.F.I. (Istituto Finanziario Industriale), a family holding company that looks after a sizable chunk of Italy. I.F.I, holds the family's 25% controlling interest in Fiat, plus a 50% interest in Cinzano vermouth and investments in cement, chemicals, shipping, insurance, finance, assorted hotels and real estate.

One particular I.F.I, interest is in Villar Perosa, a town of 4,000 not far from Turin. The people use a church on the Agnellis' 60-acre country estate and draw their livelihood from an I.F.I.-controlled ball-bearing industry. They also routinely elect Agnellis as their mayors. Gianni has held the job since World War II, and his main concerns have been with Villar Perosa's housing, its budget and its roads. Recently I.F.I, issued 3,000,000 shares of stock that were eagerly bought at $9.63 each by some 30,000 investors. Gianni's own 15% of I.F.I, is the main source of his wealth. Altogether, the Agnelli family riches are estimated at about $500 million.

If Agnelli