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Fiat’s Alfa Romeo Brand May Shift Production out of Italy

by on Jul.10, 2013

Fiat/Chrysler CEO Sergio Marchionne.

He’s already suggesting Fiat might move its corporate headquarters out of Turin, and now Fiat/Chrysler CEO Sergio Marchionne has fired another shot, telling reporters the Alfa Romeo brand is considering whether to move its manufacturing operations out of Italy, as well.

Raised in Canada, Marchionne has shown an unexpected lack of tolerance for the problems in his family homeland in recent years.  He has repeatedly complained about the high cost, as well as the structural obstacles, to doing business in Italy. And he has been demanding change with the alternative being a hollowing out of Fiat operations in its home market.

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The timing of Marchionne comments, during a meeting with reporters in Turin where Fiat is based, comes as no surprise. Alfa and sister brand Maserati are in the midst of dramatic transformations backed by a flood of new product. And both are putting increasing emphasis on markets outside Europe.

“The relaunch of Alfa Romeo will continue for sure,” Marchionne stressed, adding that, “Italy should decide if they want it to happen in this environment or not, as Fiat and Chrysler have several alternatives.”

The Alfa Romeo 4C will blaze a return to the U.S. market for the Italian maker - but whether it will be built in Italy is far from certain.

Two years ago, Marchionne won significant concessions from the Italian auto union, including the ability to close a low-productivity plant in Sicily, by warning he would authorize a shift in production to factories outside Western Europe.

He has more recently been dropping hints that Fiat might shift its corporate headquarters from Turin to the Detroit suburb of Auburn Hills, where Chrysler has its own sprawling HQ and engineering center. At the time when Fiat took control of the U.S. maker, following its 2009 emergence from bankruptcy, the conventional wisdom was that the combined management operations would move to Italy.

Marchionne has also made it clear that once Fiat completes its planned acquisition of Chrysler’s remaining stock he wants a shift from the Italian stock market to the New York Stock Exchange where the U.S. maker had traditionally been listed.

The Fiat/Chrysler CEO isn’t the only executive to complain about doing business in Italy – or in Western Europe, in general – but he appears more than willing to back his griping up with action.

The maker isn’t ready to walk away entirely from its ancestral home. Marchionne made his comments, in fact, at the SevelSud plant where it will partner with troubled French maker PSA Peugeot Citroen to produce new vans, a project that Fiat will spend 700 million Euros on.  But the executive stressed Fiat “needs clear and reliable rules” before it would invest any more money in Italy, and s putting a hold on other investments.

Among other things, that could delay plans to add new models at its main factory, the Mirafiori plant in Turin. And new Alfa Romeo models might be shifted to plants outside Italy or even outside of Europe, where Fiat and Chrysler are already boosting production as they expand their global operations.

Alfa, in particular, is hoping to make a long-awaited return to the U.S. market where it hasn’t had a serious presence in two decades.  Earlier this year, Marchionne gave approval to the brand’s new 4C sports car which is expected to reach the States in time for the 2015 model-year.

Marchionne’s comments appear primarily directed at Fiom, the Italian automotive union, over revised rules that would result in longer work shifts and shorter breaks.  But the Fiat/Chrysler CEO has also wagged his finger at the Italian government, as well, in recent months.

The automaker also has an ongoing dispute with the United Auto Workers Union whose retiree health care program, or VEBA, still holds the remaining 41.5% stake in Chrysler that Fiat doesn’t yet own.  The two sides are waiting for a Delaware court referee to decide on a fair value for the union’s shares.

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2 Responses to “Fiat’s Alfa Romeo Brand May Shift Production out of Italy”

  1. Jorge M. says:

    Basically all CEOs want slave labor producing their products. They don’t want any labor or business laws or human rights. They want to be able to exploit and abuse labor as they please, like Foxconn does for Apple in China so that Tim Cook can receive $700 MILLION in annual compensation while the slaves commit suicide due to the abuse they suffer.

    GM has already publicly announced that they plan to move as much of their U.S. operations as possible to China including, design and engineering. Fiat will move to the cheapest place to produce their products. VW found out that cheaper doesn’t mean better as they invested Billions in a new factory in Mexico only to find the laborors were so unskilled they could not produce a quality vehicle and many of the workers didn’t care.

    What will it take for the U.S. populace to rise up and say enough is enough. In some countries many of the unscrupulous corporate CEOs would have been beheaded by now…

  2. manousos1 says:

    Jorge M says:
    “ What will it take for the U.S. populace to rise up and say enough is enough….”
    “Basically all CEOs want slave labor producing their products….”

    Paul A. Eisenstein on Jul.10, 2013
    “Raised in Canada, Marchionne has shown an unexpected lack of tolerance for the problems in his family homeland in recent years….”

    WHO really is Marchionne ?
    WHAT makes him so arrogant ?
    THE FACT that the FIAT’s products are so impeccable ?

    Have you ever tried to communicate with FIAT ???

    Have you ever tried to tell them (using only PURE mathematics and PURE thermodynamics) that they have Patented the WRONG Patents ?

    and that
    their engines are PROGRAMMED the WRONG way ?

    and that their engines deserve a better PROGRAMMING ?

    If not, try this: