Marchionne: Every 5th Auto Plant In Europe Should Be Closed - The American Way

Bertel Schmitt
by Bertel Schmitt
marchionne every 5th auto plant in europe should be closed the american way

As dark clouds bunch up over Europe the less healthy of the many European carmakers frantically look for friends that help them get through the hard times ahead. Fiat-Chrysler is “talking to everyone,” CEO Sergio Marchionne told Reuters. Marchionne isn’t picky when it comes to corralling companions: “We can be an active partner everywhere around the world.”

“Roughly, we’re looking at a number in the neighborhood of 20 percent of installed capacity that may be viewed in terms of being structurally redundant,” Marchionne said. I guess he wants (but does not dare) to say that every fifth car plant in Europe should be closed and its workers fired.

How does Marchionne want to do this? The American way:

“America fixed the problem in 2008 and 2009… Capacity has been taken out and the workforce has become incredibly flexible.”

In January, Fiat had been rumored to be flirting with PSA, now the French bride seems to be romanced by an American. Marchionne has helpful advice for the couple:

“It is key that the situation in Europe is addressed. If the potential Peugeot-GM tie-up becomes reality, I sincerely hope it deals with the overcapacity issue. It has to.”

Marchionne did not answer the question that is on everybody’s minds: How on earth would a Peugeot-GM tie-up address overcapacity?

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10 of 11 comments
  • Halftruth Halftruth on Feb 28, 2012

    I think Serg means there will be too much capacity. I think he is right considering the economic climate there. Funny how GM keeps going back for more in Europe, aint it? Or is now the time to buy?

    • Buickman Buickman on Feb 28, 2012

      now's the time when it's good to be the bank. oh wait, that's all the time.

  • CJinSD CJinSD on Feb 28, 2012

    If Obama gets reelected, look forward to bailing out the French auto industry.

    • See 3 previous
    • Windswords Windswords on Feb 29, 2012

      @cognoscenti And that's the rub, ain't it? What's good for the goose is good for the gander. Based on the spew from the left I heard over the years I don't see why it can't be said that anything is the Bamster's fault. What other cliche's can I come up with to describe this? You made your bed, now lie in it? Turnabout is fair play? How about you can't have it both ways?

  • Felix Hoenikker Felix Hoenikker on Feb 28, 2012

    Even if they close every 5th European auto plant, they won't be close to the downsizing in the US auto industry over the past decade. They might have to close every third one for the industry to stay above water in Europe.

    • Lorenzo Lorenzo on Feb 28, 2012

      American production in its heyday was 55% of a 17 million market, and it's now running at capacity with 46% of a 14 million market. That's a reduction of nearly 3 million cars by American manufacturers, but it was offset by increased domestic production of foreign makes, and some domestic production was moved to Canada and Mexico. Had the domestics had competitive models, that reduction might not have been as great. In any event, total North American car production wasn't reduced all that much. Europe, though, has been going the other way with added capacity in the Czech Republic, Poland, Turkey, and Slovakia, with no major reduction in France, Spain, Italy, or Germany. It helps that the Japanese and Koreans don't have much of a presence in Europe, and the Germans are serving as a release valve with exports to China. If either of those factors change, Europe is headed for a wrenching adjustment.

  • 50merc 50merc on Jun 29, 2012

    "Dark clouds bunch up over Europe." At least that's better than the lights going out all over Europe. And not only is there 20 percent or greater overcapacity now, as the population ages and dies off the outlook gets even gloomier.