Auto giant Fiat's future plans put Italy on edge

Fiat's boss painted a bleak picture of the Italian auto market but said the historic brand will stay in the country, amid union warnings that Italy's top private sector employer is set to shed jobs.

Sergio Marchionne, who also heads up US auto giant Chrysler, was responding to a furore in Italy after Fiat last week said it would not stick to its previous investment targets and would unveil a new strategic plan next month.

"Fiat has accumulated losses of 700 million euros ($916 million) in Europe and is supporting these losses thanks to success in the United States and emerging markets," Marchionne told La Repubblica daily on Tuesday.

Of the 3.5 billion euros in operating profit Fiat expects this year, none of it will come from Italy, where there has been a collapse in sales, he said.

Asked if he saw any light at the end of the tunnel, Marchionne responded: "I don't see anything until 2014. That's why investing in 2012 would be lethal."

Italian Prime Minister Mario Monti spoke to Marchionne later on Tuesday and the two agreed to hold a meeting on Saturday, where the Fiat boss will inform ministers of the company's plans in Italy, the government said in a statement.

Economic Development Minister Corrado Passera and Welfare Minister Elsa Fornero will also be present, along with Fiat chairman John Elkann -- a scion of the company's founding family and key shareholders, the Agnellis.

Marchionne has been a divisive figure since taking over in 2004 an industrial powerhouse that once symbolised Italy's post-war economic boom.

Marchionne over the past few years has forged a partnership with once-troubled US giant Chrysler, which is now propping up Fiat's results.

"I am trying to profit from the recovery of the American market, exploit it to the maximum, to attain the financial security that would allow me to protect the presence of Fiat in Italy and in Europe at this dramatic moment," he said.

But the chief executive's orientation towards the United States and his repeated barbs against Italy have sparked anger in Fiat's heartland.

Fornero told La Repubblica that Fiat had "a duty" to explain itself, adding that Marchionne "owes this not so much to the government or the shareholders but to Fiat workers and to the thousands of families that depend on it."

Fiat employs a total of 197,000 people, including around 80,000 in Italy.

"Fiat has done so much for Italy but it also has responsibilities towards this country. We would like it to bear that in mind," Fornero said.

But she cautioned that "the government cannot impose its choices on a private company" -- unlike the French government which has raised its hackles at Peugeot's plan to close a landmark plant near Paris and shed 8,000 jobs.

The crisis in the country's auto market has proved worse than expected, with car sales in Italy plunging by 20.2 percent in August on a 12-month comparison.

Trade union leaders are already warning that Fiat could be preparing to announce the closure of one or more of its five plants in Italy, which are currently only producing at 50 percent capacity due to the slump in demand.

Fiat's history has reflected the downs as well as the ups of Italian industry and it became an important hub of trade union militancy and violent protests in the 1970s and 1980s -- a period that some say could be returning.

The company, which was founded in 1899, is most closely associated internationally with its late veteran chairman Gianni Agnelli -- a fashionable playboy and shrewd tycoon who engineered a massive international expansion.

Marchionne meanwhile has come under growing criticism from his peers, with fashion billionaire Diego Della Valle on Friday criticising his "bad decisions" which go against "the interests and the needs of the country."

Italy "has given a lot to Fiat -- maybe too much," Della Valle said.

Antonio Di Pietro, a populist politician and leader of the Italy of Values party, said he was saddened that "people like Marchionne take money and resources from the country and do what they want with them."

"Italy needs industrial giants like the Fiat of yesteryear," he said.


Editor’s note:Yahoo Philippines encourages responsible comments that add dimension to the discussion. No bashing or hate speech, please. You can express your opinion without slamming others or making derogatory remarks.

  • US renews travel warning to Mindanao
    US renews travel warning to Mindanao

    The US State Department renewed its warning about the risks of travel to the Philippines, in particular to the Sulu archipelago, certain regions and cities of Mindanao and the southern Sulu Sea area. In an update on Wednesday of a travel warning it issued Nov. 20, 2014, the State Department said US citizens should continue to defer non-essential travel to the Sulu archipelago due to the high threat of kidnapping of international travelers and violence linked to insurgency and terrorism there. …

  • Phl gains support for APEC Action Agenda
    Phl gains support for APEC Action Agenda

    The Philippine initiative to put the interests of micro, small and medium enterprises (MSMEs) front and center in global and regional trade has made significant progress following the conclusion on Thursday of the 2nd APEC Senior Officials’ Meeting (SOM2) and Related Meetings in Boracay, Aklan. Called “The Boracay Action Agenda to Globalize MSMEs,” the Philippine proposal calls for a host of specific, concrete and practical interventions that APEC economies can implement to provide MSMEs wider …

  • Phl to join Bangkok meet on Rohingya crisis next week
    Phl to join Bangkok meet on Rohingya crisis next week

    The Philippines will join a 15-nation meeting in Bangkok, Thailand next week to address the migration crisis involving thousands of Rohingyas who escaped persecution in Myanmar and Bangladesh. Justice Secretary Leila de Lima bared this yesterday after meeting with United Nations High Commission for Refugees (UNHCR) representative to the Philippines Bernard Kerblat. In an interview, De Lima said the Philippine government has been invited to the meeting. …

  • Magnitude 4.2 quake jolts Sorsogon
    Magnitude 4.2 quake jolts Sorsogon

    LEGAZPI CITY—A magnitude 4.2 earthquake hit Prieto Diaz town in Sorsogon before dawn yesterday, the Philippine Institute of Volcanology and Seismology (Phivolcs) said. …

  • Drought-resistant rice breeds bared
    Drought-resistant rice breeds bared

    SCIENCE CITY OF MUÑOZ, Nueva Ecija – Amid the searing heat, the Philippine Rice Research Institute central experiment station here has identified nine rice breeds which have been proven to be drought-resistant and produce high yields in temperatures as high as 38°C based on a recent study. Thelma Padolina, lead researcher of the study titled “Screening of rice-induced mutants for heat and drought tolerance,” identified the breeding lines as the Ballatinaw lines, PSB Rc72H and Azucena lines. …

  • Phl, US assert rights, ignore China warning
    Phl, US assert rights, ignore China warning

    The United States military will continue air and sea patrols in international waters even after the Chinese navy repeatedly warned a US surveillance plane to leave the airspace over artificial islands China is creating in the disputed South China Sea. The Philippine government also declared it would continue activities in the region, calling on China to respect freedom of navigation and aviation. “Our position on the importance of letting freedom of navigation, freedom of aviation and …

  • MM shutdown eyed for quake drill; 6 schools warned
    MM shutdown eyed for quake drill; 6 schools warned

    Electricity and mobile phone services would be cut throughout Metro Manila, and all private and government offices and businesses, including shopping malls, would be closed. That would be the situation on July 16 between 3 and 8 p.m. to simulate the scenario of a 7.2 magnitude earthquake. The Philippine Institute of Volcanology and Seismology (Phivolcs) has warned that an earthquake of that magnitude could occur and kill at least 33,500 people and injure at least 113,600 others following a …

  • Subaru XV now priced among sedans
    Subaru XV now priced among sedans

    Motor Image Philipinas (MIP), the authorized distributor of Subaru in the country, has positioned its brand new crossover SUV, the Subaru XV, well within the sedan segment’s price range. This move, according to MIP, was made to give the public an opportunity to experience the brand’s unique automotive technologies by lowering its price. Buyers of […] The post Subaru XV now priced among sedans appeared first on Carmudi Philippines. …


Should Aquino be held accountable over the Mamasapano operations?

Poll Choice Options