Weekend Head Scratcher: Should Fiat-Chrysler Be An Italian or American Company?

Though the the impact of nationality on the auto industry may be fading, the issue couldn’t be more central for Sergio Marchionne and his Fiat-Chrysler Empire. Having accepted aid from both the Italian and American governments, the future merging of Fiat and Chrysler raises a delicate question: will a merged Fiat/Chrysler be an Italian or American firm? When Marchionne suggested that the Fiat-Chrysler alliance could be headquartered in Detroit, Italy erupted in recriminations. The Italian government called Marchionne onto the carpet to explain himself, even as critics lashed out saying

The government is moving too late, but better late than never. Marchionne is more oriented strategically toward the U.S. than Europe

And sure enough: Fiat restated its commitment to investing some $27b into Italian production, but as AFP reports

the question of whether Fiat would remain based in its birthplace of Turin remained unclear, with local officials saying it had been put off for three years and would depend on the company’s performance.

But, while American and Italian stakeholders bicker over the “national character” of a merged Fiat-Chrysler, the proposal establishing four headquarters in Turin, Detroit, Brazil and “somewhere in Asia” points to the real issue: Fiat-Chrysler must orient itself around its markets, not any national corporate character. The longer the divide between Italy and the US is played up, the more Fiat-Chrysler runs the risk of developing a dysfunctional corporate culture like the DaimlerChrysler “marriage of equals.” It’s just too bad that, by tying itself up with the governments of the USA and Italy, Fiat allows the “national character” question to take such prominence.