Fiat Shuts Down Italian Production For Two Weeks As Post-Clunker Sales "Collapse"

Edward Niedermeyer
by Edward Niedermeyer

Fiat is acknowledging a “a collapse in orders” as Italian scrappage rebates expire, and as a result, all six Italian Fiat plants will close for two weeks [via the BBC]. The move is being justified as a break from past overproduction, with Fiat spokesfolks claiming “we’re only building to demand.” Though that might help CEO Sergio Marchionne justify his $6.5m paycheck, it couldn’t come at a worse time. Fiat is putting 30,000 employees out of work for the next 14 days, just as it faces widespread protests over the closure of its Sicilian Termini Imerese plant. With the Italian government (and even the Pope) condemning Marchionne’s decision to cut the perpetually money-losing plant, this unplanned vacation will give workers plenty of time to agitate and organize further resistance. Not that Marchionne could have avoided it. Italy’s consumer subsidies for new cars were keeping demand artificially high, and the Italian government was hoping it could offer their renewal in exchange for a Fiat commitment to the Imerese plant. But as the Wall Street Journal [sub] opines, Europe’s scrappage-swollen market has to come down to earth at some point. Just as Fiat has to rid itself of some of its terminally underperforming Italian capacity, at some point. And, as usual, there’s no time like the present.

Edward Niedermeyer
Edward Niedermeyer

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  • Indi500fan Indi500fan on Feb 22, 2010

    If Italians won't buy Fiats, I'm thinking they will really be a hard sell here in the US.

  • Marjanmm Marjanmm on Feb 23, 2010

    Always funny to watch people bash interventionism in this blog. How is it possible that the commentators have forgotten so quickly that unchecked laissez faire capitalism and unchecked financial crooks brought the world economy into the state it is in? I can't believe after all the things that happened in that last couple of years people still believe free market should regulate everything automagically.

  • Mr Carpenter Mr Carpenter on Feb 23, 2010

    Actually, to gently correct you, marjanmm, the world has not had anything resembling a free market for decades. It's been intervention of one kind or another by all nations, to varying extents. I guess when you don't know what sunshine really looks like, a slightly less cloudy day appears nicer than a dank dark gray cloud day, but to call the former a "sunny day" and think that it is, is not accurate. Almost nobody alive has actually lived in a free market society of any fashion. We can, however, read about history and see how it worked for people willing to give it a chance - and it was successful enough that many of us would like to give it a try. Lord knows the control freak powers that be have had their chance and all the results that you appear to be laying at the feet of "free market" are actually theirs.

  • Marjanmm Marjanmm on Feb 23, 2010

    Mr Carpenter, I just don't see how such a hugely complex system like world or a big country's economy can be simply let alone trusting individual greed, ability, chance and initial conditions to influence it. What you get is artificially created endless and all accompasing machiavellian and darwinian struggle. There is nothing humane about it. Doesn't it leave bad taste in your mouth just thinking about it?

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