Mario Monti: Let Chrysler Bail Out Fiat, No Money From Italy
With the exception of France, European governments offer very little help to their ailing car industries. Fiat hoped that Italy would follow the French example. Today, it received a cold shower instead. Italy’s prime minister Mario Monti “offers car makers sympathy, but no aid,” says Reuters.
Italy has not intervened with financial support for Fiat because its European losses are more than covered by revenue from its Chrysler unit in the United States, the report says.
In September, Monti held out the possibility of export aid for Fiat, but, says Reuters, Monti’s weekend announcement that he intends to resign from office before Christmas would suggest that any remaining hopes of export-boosting measures are slim.”
New car sales in Italy are set to fall about 20 percent this year to less than 1.4 million. Before the start of the 2008 crisis, Italians bought about 2 million cars a year.
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
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FIAT can't touch Chryco's money directly, a consequence of the Diamler/Cereberus fiasco. That's why they're in such straits around the world. Cashflow baby. Sergio is dancing as fast as he can to make sure that nothing comes due too soon. I'm surprised that he didn't get Chryco to redesign the Brazilian cars on the side to leverage his operations. If you notice, all the car mfg. that are in trouble, with the exception of Opel, are located in countries that also are in trouble. The countries don't have anything in the piggy bank to give to *anybody* let alone car co.
So where is Fiat getting the money to pump into Maserati? In yesterday's Automotive News Europe, Luca Ciferri reported that "Fiat Group is investing more than 1.2 billion euros in its sports car subsidiary to try to increase sales to 50,000 vehicles a year by 2015." Link: http://europe.autonews.com/apps/pbcs.dll/article?AID=/20121212/ANE/312129995/maserati-boss-takes-aim-at-german-rivals&cciid=email-ane-daily
I can't recall reading that FIAT had asked the government for financial assistance or incentives. There was something discussed about improving the tax environment for exporting vehicles. I don't think that's off the table because of Monti's exit, just something for the successor to deal with. Sergio has stated that he will focus on increasing volumes for the company's luxury brands. He's taking a gamble with this approach. However, their market research indicates that’s the best bet to invest at the moment. I hope he’s successful with these efforts as it will benefit both Chrysler and Fiat. He has stated, from the beginning, that he wanted the companies merged to form one company and be a major player in the industry.
I have been following Fiat for a few years now, but I can't recall Marchionne asking for a bail out at anytime. As a group they are profitable unlike PSA for example. They will get the export incentives shortly I'm quite positive, the deal is likely done. Marchionne is supposed to announce plans to build Fiat and Jeep SUV's at Melfi, next week.