Fiat may need to close two plants in Italy, says Marchionne
Exports need to offset weak demand in Europe
24 February, 13:08
In an interview published in daily newspaper Corriere della Sera, Marchionne predicted that the demand for automobiles in Europe would remain low for at least the next two years but added that Fiat had an opportunity to use its plants in Italy to meet the growing demand in the United States for the vehicles of its partner Chrysler.
Fiat took control of Chrysler after it went into bankruptcy in 2009 and, with Marchionne at the helm of both companies, it has turned Detroit's third-biggest carmaker around to the point that its plants in the US are operating at full capacity.
So it needs output from its other plants in Canada, Mexico and Italy to meet one third of the demand in the US.
Marchionne said that in order to make exports to the US feasible production costs in Italy needed to become more competitive and this meant ensuring that plants in Italy can be utilized ''in full and flexible capacity''.
"(If this is not possible) we will have to withdraw from two of our five operating plants," he said.
"It is like the situation in the film Sophie's Choice, when a Nazi tells Sophie she must choose to save one of her two children otherwise both would be killed. "And after making that choice she has to live with its consequences for the rest of her life. I hope I never have to be in that situation''.
In regard to labor relations, Marchionne said that some union leaders in Italy were more interested in politics and ''talk too much in the media about Fiat and Marchionne and talk too little with us''.
Since 2009 Fiat has boosted its initial 20% stake in Chrysler to 58.5%, while the remaining 41.5% is held by VEBA, a fund affiliated with the United Auto Workers (UAW) union, a situation which Marchionne said will soon change.
''Right now we are looking at three options. One, we go public with our stake; two, Fiat buys out VEBA; or three, we merge Fiat and Chrysler which would lead to an automatic listing that would dilute VEBA's stake as well as that of EXOR (the financial arm of the Agnelli family through which it controls Fiat).
''All I can say now is that the first option is the least probable,'' he added.
In the interview Marchionne praised the new Italian government of Premier Mario Monti which he said had ''in very little time given the world an image of Italy as a country which is changing. This was an incredible success''.
Friday, 24 February 2012
Guarda la foto1 di 1
(ANSA) - Rome, February 24 - Fiat may be forced to shut two of its five plants in Italy if it cannot use them to produce cars to export to the American market at a competitive cost, the company's CEO Sergio Marchionne said on Friday.
Posts
