04 November 2010

Can Fiat Gain Concessions For Italian Production?

Fiat supremo Sergio Marchionne has criticised Italy's poor labour efficiency and industrial competitiveness. He says Fiat doesn't make money from making cars in its home country and it is the overseas factories that make its profit. However, others within Italy say that Fiat is what it is because of the loyal public toward its products. Indeed, in 2009 the Fiat brand had 25.5% of car the Italian car market and add a percentage point if you include light commercials, or over 600,000 cars/LCVs.

I see it as both points of view being correct. Fiat needs changes in how things are done within Italy, while it does need the volumes of sales it gets from its home market. Will laws change to make it easier to lay off workers and get greater efficiencies for making cars there? I think not. So such statements from Mr Marchionne will change nothing and risk alienating loyal local support. His frustrations may have got the better of him as he tries to improve Fiat's competitiveness.

What it means to me: Some things are better left unsaid, as it will change nothing anyway.

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