Italy To Fiat: Please, Please, Please Don't Go, I'm Beggin You To Stay, I Love You So
May 24th, 2013 7:04 AM
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“Italian Industry Minister Flavio Zanonato said he asked automaker Fiat to stay in Italy after its planned merger with Chrysler, which has led labor unions to fear it plans to move its headquarters to the United States.”
Zanonato said earlier this week he would seek a meeting with Fiat Chief Executive Sergio Marchionne: “I’ve spoken to Marchionne. It was a friendly phone conversation and I told him what I will tell him when we meet face to face: I will ask him for Fiat to stay in Italy and continue being an Italian company,” Zanonato said on Thursday on the sidelines of an annual meeting of business lobby Confindustria.”
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I think Sergio has a pretty realistic view on his company and its place in the automotive landscape. He has on numerous occasions tried to form partnerships, sought mergers, etc in the name of increased scale. Even Fiat with the addition of Chrysler is not a huge player on a global scale the likes of GM, Toyota, VW, Ford and others. As a mainstream auto maker (primarily) they cannot survive competing against the global giants without gaining volume and or footholds in additional markets. Niche players may be able to turn a profit indefinitely on small volumes, but I dont think the same would hold true for mass market manufacturers. Eventually economies of scale will push smaller players out of the market. The Chinese are coming, who knows who else will eventually appear on the global stage to challenge to western automakers. Sergio knows he needs every advantage if his company is to survive and thrive. Italy, in its present state, is far from an advantagous place to manufacture. I am sort of hoping the agreement with Mazda to supply a roadster blossoms into expanced relationship. Both companies would benefit from the scale, parts bin, markets, platforms, etc. I dont think Mazda is long for this world either without help from a larger automaker.
What is the point to move headquarters to US - to pay higher corporate taxes, healthcare and get constantly harassed by Obama's tzars, IRS and Congress? How about Russia - same treatment from Government but much lower corporate tax or even better - to Ireland.
he's not called internally, 'il americano' for nothing.
If Fiat wants to be competitive and grow Italy needs to change or Fiat needs to get out of there. It's not just tax, it's militant unions and generally unacceptable labor laws. Ask yourself why no foreign car manufacturer is not present in Italy? There are foreign manufacturers in many other EU countries - Germany, France, UK, Belgium, Spain etc yet no one comes to Italy. Why?