FCA Payday: Italy Readies $7.1 Billion for Automaker
Italy is on the cusp of approving a 6.3 billion-euro ($7.1 billion) loan for Fiat Chrysler Automobiles (FCA). Suppressed sales stemming from coronavirus lockdowns have encouraged governments around the globe to lend businesses a hand or — more accurately — fists full of money.
Bloomberg claims FCA’s payday will be Europe’s biggest government-backed financing of an automaker since the start of the pandemic, but it’s hardly the only company needing money. General Motors and Ford utilized credit lines to amass billions of dollars for their rainy day funds — and it’s definitely pouring outside. Ford figures it lost roughly $5 billion in operating costs in the three months leading up to June. Meanwhile, Fiat Chrysler estimates it lost $5.5 billion through the first quarter of this year.
FCA says the funding will be used exclusively for the manufacturer’s Italian activities — especially payroll, issuing payments to suppliers, and planned investments for domestic facilities. Intesa Sanpaolo reportedly authorized the the loan last month and trade-credit insurer Sace will guarantee 80 percent of the total amount.
“Car sales in Italy will plunge this year to 1.2 million compared with 2.1 million in 2019,” said Dario Duse, a managing director at consulting firm Alix Partners, who forecasts that industry-wide sales may take more than five years to return to pre-pandemic levels.
Registrations fell 57 percent in Europe in May after a 78 percent drop in April. The exact shape of a potential recovery is still unclear as automakers from Volkswagen Group to FCA prepare to announce results for what likely will be a devastating second quarter.
The situation has already encouraged other European nations to pour buckets of money into brands like Daimler and Renault, both of which received billions in government-backed loans from Germany and France, respectively. The last piece in FCA’s puzzle will be approval from Italian Finance Minister Roberto Gualtieri. While the loan terms have yet to be reviewed in their entirety, it’s presumed the ministry will sign off.
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- Del My father bought GM cars in the 60's, but in 1971 he gave me a used Datsun (as they were called back then), and I'm now in my 70's and am happy to say that GM has been absent from my entire adult life. This article makes me gladder than ever.
- TheEndlessEnigma That's right GM, just keep adding to that list of reasons why I will never buy your products. This, I think, becomes reason number 69, right after OnStar-Cannot-Be-Disabled-And-It-Comes-Standard-Whether-Or-Not-You-Want-It and Screw-You-American-Car-Buyer-We-Only-Make-Trucks-And-SUVs.
- 3SpeedAutomatic Does this not sound and feel like the dawn of ICE automobiles in the early 20th century, but at double or triple speed speed!!There were a bunch of independent car markers by the late 1910’s. By the mid 20’s, we were dropping down to 10 or 15 producers as Henry was slashing the price of the Model T. The Great Depression hit, and we are down to the big three and several independents. For EVs, Tesla bolted out of the gate, the small three are in a mad dash to keep up. Europe was caught flat footed due to the VW scandal. Lucid, Lordstown, & Rivian are scrambling to up production to generate cash. Now the EV leader has taken a page from the Model T and is slashing prices putting the rest of the EV market in a tail spin. Deja vu……
- Michael Eck With those mods, I wonder if it's tuned...
- Mike-NB2 I'm not a Jeep guy, but I really, really like the 1978 Jeep Cherokee 4xe concept.
Why only $7.1 billions and why Italian government? Italians are poor, that's not fare. If Sergio was alive he would, via some arm twisting, force US Government to shell out $15 billions of American liras from CARES act.
>>FCA says the funding will be used exclusively for the manufacturer’s Italian activities