Marchionne Calls For EU Intervention, End Of Free Trade

by Bertel Schmitt

Published: October 10th, 2012

It looks like Fiat and Chrysler CEO Sergio Marchionne does not want to be head of the European automakers association ACEA much longer. Today, he called for a massive EU rescue package for the ailing European car industry, with coordinated capacity cuts as the centerpiece. He also called for a stop of free trade agreements. “Let the European car industry make its adjustments… This is not the time to embrace free trade,” Marchionne said while Reuters was taking notes.

Earlier this year, Marchionne had called for a massive government intervention that would require all automakers to shed capacity, most likely with financial support from Brussels. At the time, an anonymous European auto exec predicted serious pushback from the German side, which is doing just fine, danke. The German side did not waste time. To the delight of the EU, which has other problems, the German members of the ACEA did not support Marchionne’s plan, and it went nowhere. They also started working on Marchionne’s ouster. Soon thereafter, Volkswagen demanded that Marchionne step down as the head of the lobbying group, after Marchionne accused Volkswagen of dumping.

Last month, Marchionne said that ACEA’s board agreed all members would reach their own decisions. He also hugged Volkswagen CEO Martin Winterkorn in front of cameras. “They hugged, but they did not kiss,” quipped Daimler CEO Dieter Zetsche.

All of this seems to be forgotten, and Marchionne calls for the strong arm of Brussels again. Marchionne also said the EU should delay signing free trade agreements. When he said this before, it earned him a serious rebuke from EU Trade Commissioner Karel De Gucht. Export-heavy German carmakers and export-heavy EU states are for FTAs. It seems like Marchionne is under a lot of stress, and the way he is going, he might be under more stress soon.

#ACEA #BertelSchmitt #Capacity #EU #Fiat #FTA #Italy #Marchionne

Bertel Schmitt

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.

More by Bertel Schmitt

Comments

Join the conversation

4 of 36 comments

Schmitt trigger on Oct 11, 2012

"A TTAC “Bailout” definition primer:" Larry, excellent primer. All that it is missing is to replace the word "Brussels" with "Washington".

Like Reply
NMGOM on Oct 11, 2012

I must say, I had been a fan of the flamboyant, folksy, sweater-wearing, conversational Sergio. And A fan of his good leadership at Chrysler, including the image building SRT Viper and new Ram 1500. But this has gone too far. For the EU to curtail FTA's would fly in the face of its own desire for economic progress AND influence around the world. And it certainly represents a betrayal of Sergio's public agreement with Mr. Winterkorn. And it would again burden the people in "rich states" that have efficiently running companies, requiring them to spend their taxes saving people in poor states with car companies that can't do well. If that isn't ever Communism, what is?....except here among states not people. The Germans are already going to carry the bulk of the financial burden trying to save Greece. You certainly don't hear about great Italian car companies like Ferrari, Lamborghini, and Pagani crying for help, do you? Maybe Fiat should take a lesson from them and start making upscale, decent cars. "stroker49" was right. If the destiny of VW is to rule Europe in the automotive realm, then so be it. (I can hear BMW and Mercedes screaming already.) If Fiat cannot survive on its own merits, then it needs to go under: so be it. Carrying dead wood does little other than hurt your back and make suitable kindling. And, no, I was not in favor of the GM-and-Chrysler "bailout" (as formulated: the structured bankruptcy should have reverted the component divisions back into their individual original companies, --- then we could have some really good competition here.) ------------

Like Reply
- See 1 previous
- Th009 on Oct 12, 2012
  
  Ferrari is actually owned by Fiat, Lamborghini by Volkswagen. Given Pagani's cars are handcrafted and priced in the millions, Fiat is really the only independent manufacturer/manufacturing group in Italy.
  
  Like
- NMGOM on Oct 12, 2012
  
  @th009 Yup, thanks "th009"... Ferrari is "loosely" owned by Fiat (meaning they keep hands off, per agreement); Lambo is quite "tightly" owned by VW and even uses Audi parts; and Pagani is indeed independent, but you can still pick up a current Zonda F (not Huayra) for only €480K in Europe. (See price list). A few years ago, a Zonda F (NOT the "R") would have been about $320K, but now the price has gone up to about $600K stateside. But it has a manual transmission, and Huayra does not! (See links: the YouTube video is fun!). http://www.youtube.com/watch?v=zIoFnfMhq_Y http://www.pagani.com/it/default.aspx http://en.wikipedia.org/wiki/Pagani_Zonda http://www.insideline.com/pagani/2012-pagani-huayra-first-look.html http://www.germancarforum.com/community/threads/the-pagani-zonda-f-price-list.6848/ ===============
  
  Like

Recent Comments

Kjhkjlhkjhkljh kljhjkhjklhkjh A prelude is a bad idea. There is already Acura with all the weird sport trims. This will not make back it's R&D money.
Analoggrotto I don't see a red car here, how blazing stupid are you people?
Redapple2 Love the wheels
Redapple2 Good luck to them. They used to make great cars. 510. 240Z, Sentra SE-R. Maxima. Frontier.
Joe65688619 Under Ghosn they went through the same short-term bottom-line thinking that GM did in the 80s/90s, and they have not recovered say, to their heyday in the 50s and 60s in terms of market share and innovation. Poor design decisions (a CVT in their front-wheel drive "4-Door Sports Car", model overlap in a poorly performing segment (they never needed the Altima AND the Maxima...what they needed was one vehicle with different drivetrain, including hybrid, to compete with the Accord/Camry, and decontenting their vehicles: My 2012 QX56 (I know, not a Nissan, but the same holds for the Armada) had power rear windows in the cargo area that could vent, a glass hatch on the back door that could be opened separate from the whole liftgate (in such a tall vehicle, kinda essential if you have it in a garage and want to load the trunk without having to open the garage door to make room for the lift gate), a nice driver's side folding armrest, and a few other quality-of-life details absent from my 2018 QX80. In a competitive market this attention to detai is can be the differentiator that sell cars. Now they are caught in the middle of the market, competing more with Hyundai and Kia and selling discounted vehicles near the same price points, but losing money on them. They invested also invested a lot in niche platforms. The Leaf was one of the first full EVs, but never really evolved. They misjudged the market - luxury EVs are selling, small budget models not so much. Variable compression engines offering little in terms of real-world power or tech, let a lot of complexity that is leading to higher failure rates. Aside from the Z and GT-R (low volume models), not much forced induction (whether your a fan or not, look at what Honda did with the CR-V and Acura RDX - same chassis, slap a turbo on it, make it nicer inside, and now you can sell it as a semi-premium brand with higher markup). That said, I do believe they retain the technical and engineering capability to do far better. About time management realized they need to make smarter investments and understand their markets better.