Italian Made Chryslers A Possible Solution For Fiat's Overcapacity Problem
Sergio Marchionne has been one of the most prolific alarmists regarding European overcapacity, and who can blame him? The economy is in the dumps in Fiat’s home market, as well as crucial export markets, and closing a plant would come with all kinds of blowback.
According to a report from Just-Auto, there may be a solution on the horizon, involving Chrysler products built in Italy and exported back to the United States. And it’s either that, or one of Fiat’s Italian plants will have to take the bullet. A Fiat spokesman told the publication
The FIOM, a prominent metalworkers union, refused to sign a deal with Fiat that promised increased compensation packages that were linked to enhanced flexibility at the plants – something which could seriously hamper the Fiat/Chrysler export plans. According to the Fiat spokesman, other labor unions are on board with the plan.
The U.S. export plan has been in discussion since the beginning of the year. A report by Reuters in February quoted FIOM’s National Secretary for the Auto Industry criticizing Marchionne’s plans. FIOM’s Giorgio Airaudo told the news service
Marchionne wouldn’t get specific with what product would be exported, he told the Wall Street Journal that “ a lot of these [Italian] plants are going to be producing for the U.S.” While other automakers are lighting their hair on fire regarding over-capacity, Marchionne has a handy escape route; American exports. Even if they aren’t as profitable as American-built vehicles, the unions are kept busy (and happy), plants are fully utilized, and the appetite for Chryslers (and hopefully, an expanded Fiat/Alfa Romeo lineup) is satiated.
More by Derek Kreindler
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I wish that Sergio Marchionne would get his story right!! Not long ago he was threatening to build Fiats, Alfa Romeos & Lancias in North America because of the European (particularly Italian) labor costs & conditions. OK the Euro to Dollar rate has dropped a bit since then, but not that much. One day he says one thing the next he says the opposite (not just on this subject!).