Fiat: Premature Eviction? [UPDATE: Production Moving To North America?]
Media from Associated Press to The Business Standard of India are abuzz with reports that Fiat (the company) is planning to cut 5000 jobs and will be spinning off its car division this summer. The stock market seems to like the idea: Fiat’s shares rose 4.15 percent.
The job cuts will affect the car division’s 30,000 employees. The Italian Newspaper La Repubblica [sub] reports that union sources believe that a further 2000 – 2500 workers will be made redundant at Fiat’s plant in Turin and another 500 will be laid off at Pomigliano. According to two analysts, what drove Fiat’s share price up weren’t the job cuts, but the rumour that they’ll spin off the car division sooner, rather than later. Does the market believe that the car division is a toxic element to the rest of the company? Well, any entity which is invested in Chrysler is probably going to be treated like a ginger-haired stepchild.
Fiat on the other hand isn’t in the mood to entertain La Repubblica’s story, dismissing the 5000 job losses as “absolutely premature and groundless.” Sergio Marchionne said “we are still working,” (well, at least they haven’t been fired) and that “it’s just speculation in the papers and whatever I might say would be incomplete.” Premature, maybe. But most premature babies tend to grow into screaming little monsters …
UPDATE: Reuters reports that
In the United States, where Fiat has taken a stake in struggling carmaker Chrysler, the Italian group would seek to produce seven models using the brands Fiat, Lancia and Alfa Romeo for a total production of more than 350,000 units.
"ginger-haired stepchild" or, "wood-headed-stepchild", as my 50-year-old sister said one day, to neck-snapping double-takes all-around...
Is it such a great surprise that another European car maker wants build cars in a country that has cheaper production costs than Old Europe? Did you trash BMW and Mercedes when they chose to build cars here? Fiat is expanding production in other lower cost areas, Serbia, Poland, Brazil, Mexico, India. Smart move. Lancia is a near luxury brand, the kind of higher value cars that we build most efficiently.
Ive been wondering how Fiat is doing... And now.. I wonder how ya can stuff a round peg into a square hole... Doesnt seem to be working...
Sergio is simply continuing the work he promised to do for both Chrysler and Fiat, increasing production, simplifying platforms, reducing costs through shared resources and aligning product for both Europe and America. Why is this a problem for anyone here? It sounds like a good business plan that any Chief Executive would implement. I applaud his willingness to take flak from the unions in Italy and to thumb his nose at American pundits who can't find their arsehole's with a piece of toilet paper! If anyone thinks that other automakers aren't working just as hard to accomplish the very same objectives, you've been reading the wrong articles. I don't think the Chrysler vehicles will be simply rebadged for Europe or Italy, either. Most of them will have been made over, (as planned) before they are released in Europe. ( 300, Sebring, T&C/Voyager, Nitro) And, considering the fact that Daimler currently handles Chrysler's sales in Europe, 54,000 units is a freaking miracle!