Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

End of Era Nigh for Fiat Family Clan

MILAN, Italy -- It seems fitting that the deal wedding Italian carmaker Fiat to General Motors is to be clinched on the day Fiat honorary chairman Gianni Agnelli, grandson of its founder, celebrates his 79th birthday.

As his managers hammered out an industrial alliance that the press said marked the end of an era for Europe's most powerful industrial dynasty, the silver-haired Agnelli spent Sunday doing what he likes best - a bit of skiing at St. Moritz, watching Fiat-owned Ferrari's Formula One team win a race on television, and then flying back to Turin.

The agreement to be unveiled later Monday guarantees the survival of the world's seventh-largest carmaker in an industry dominated by global heavyweights even as it marks the end of the Agnelli family's status as Italy's premier power brokers.

Agnelli family investments in Italian banks Sanpaolo IMI and Banca di Roma, its media holdings including two major newspapers and ownership of Turin's beloved Juventus soccer team, guarantee that the clan will continue to be a force to be reckoned with in Italy.

But with upstarts like Internet provider Tiscali now overtaking Fiat in terms of market capitalization, the Agnelli family's traditional influence in Rome, where their role as shareholders in Italy's largest employer has long given them the ear of prime ministers, is destined to wane.

The sudden death from cancer in 1997 of Agnelli's nephew, Giovanni Alberto, aged just 33, robbed the family of a young heir who was being groomed to lead Fiat into its second century.

It resolved the succession problem by recruiting Paolo Fresco, former No. 2 at U.S. giant General Electric, as chairman with a mandate to find the company a strategic ally.

If losing an heir weren't enough, the company's difficulties in finding that ally as well as the auto unit's recent losses in key emerging markets like Brazil sent it through what Fresco called "a difficult year" in 1999. While Agnelli's influence flowed from his role as chief shareholder in Italy's flagship private company, his charisma was due to personality alone.

The son of a princess and married to another, the elegantly wrinkled patriarch cultivates an image of regal casualness, enhanced by an international playboy reputation gained in his younger years by all-night parties at the family villa on the French Riviera.

Family capitalism built the industrial base that guaranteed Italy a position as one of the world's leading economies. But family capitalism is being swept away by globalization and the "new economy" as Italystruggles to keep in step with the times.