The unfriendly ping-pong between the Italian government and the Stellantis group illustrates two divergent concepts of the company… and globalization.
If you invite your worst enemy to your birthday party, you can expect some disappointments. This is what happened before our eyes on Thursday, July 11, in Turin, Italy, amidst appetizers and cocktails celebrating the 125th anniversary of the creation of Fiat and the launch of the new Grande Panda.
The brand was receiving guests on the roof of the Lingotto – the historic factory of the casa turned museum – for a ceremony organized at a time when relations between Stellantis and the Italian government are frosty. At the heart of the dispute: the future of the Italian automotive industry, largely conditioned by the positions of this global giant.
The past few months have been marked by quarrels over the name of the Alfa Romeo Milano SUV, the seizure of the Fiat Topolino by customs officials at the port of Livorno or disagreements over electric vehicle subsidies. Among others.
So here is Adolfo Urso, Minister of Enterprises and made in Italy, taking the stage and adjusting the microphones of the lectern with a stern face. The expression of this close confidant of the Prime Minister, Giorgia Meloni, contrasted sharply with the slogan of the event, smiling to the future, written in capital letters behind him.
Lesson in economic patriotism
The member of the far-right party Fratelli d’Italia began his speech with the usual thanks, for ” the celebration of a brand that, for so many decades, embodied the values of a country turned towards economic and social growth, contributing to shaping the national identity “. The use of the past tense announced the content of the speech.
Carlos Tavares and John Elkann, strongmen of Stellantis, seated in the front row, received a 14-minute lesson in economic patriotism from the Minister: ” The success of Fiat is the success of Italy, said Gianni Agnelli (Chairman of Fiat from 1966 to 2003). We are proud to represent our country around the world. Our country”, the politician insisted. “The factory is not just a place of production, but the engine of development and progress for the entire nation. I hope it is still the case”.
In a strong pause, Adolfo Urso said: ” We must work together to always make it so” .
Applause broke out in the room, filled with officials invited by Stellantis.
The member of Fratelli d’Italia (party of Prime Minister Giorgia Meloni) continued: ” It is a time for choices and responsibility. Last June, during our meeting, I mentioned Article 1 of our Constitution to Carlos Tavares: “The Republic is founded on work”, not on profit. Profit is legitimate, but not at any cost. The company has a social responsibility (…). The group must take on the social responsibility of the revival of the automotive industry in Italy, also because of what Italy has given to Fiat “.
220 billion in aid
Over the past century, Italy has been transformed by the takeoff of its automotive industry, with Fiat playing a major role. It notably participated in the great internal migration movement from the 1950s to the 1970s, carrying hundreds of thousands of agricultural workers from the south to the chains of the major northern factories, such as the Fiat sites of Lingotto, Mirafiori, or Rivalta, around the historical cradle of the Turin company.
Additionally, the Italian state has often supported Fiat. In 2012, when the country was in the midst of a serious sovereign debt crisis, an association of taxpayers estimated the cost at 220 billion euros of subsidies, aid, scrappage incentives, layoffs, or early retirements linked to the Turin-based brand since the mid-1970s.
But the industrial empire – which employed up to 200,000 workers – was never controlled by the state as Renault was in France, or by public authorities and its employees, like Volkswagen in Germany. Power within Fiat has always been in the hands of the Agnelli family, whose heir, John Elkann, is the current chairman of Stellantis.
Very Italian, Fiat dominated its domestic market, especially after absorbing its national competitors Lancia (1969) and Alfa Romeo (1987). In parallel, the group gradually internationalized, first through exports, then through the acquisition of Chrysler (2009 to 2014) led by Sergio Marchionne, and especially through the merger with PSA Peugeot Citroën (2019-2021). Seen from Italy, Stellantis’ business is now more focused on Paris or Detroit than Turin.
Bad news
However, the number of individual cars and light commercial vehicles produced in Italy has been halved between 2000 and today, falling to less than 800,000 in recent years. The last few months have not helped: Stellantis announced the sale of the Grugliasco plant, on the outskirts of Turin, effective by the end of 2023. At Mirafiori, the poor sales of the Fiat 500e forced the site to close for seven weeks this summer.
Major Stellantis assembly sites in Italy in 2024:
- Cassino (Alfa Romeo Giulia & Stelvio, Maserati Grecale)
- Melfi (Jeep Renegade, Jeep Compass)
- Mirafiori (Fiat 500e, Maserati Granturismo)
- Pomigliano d’Arco (Alfa Romeo Tonale, Fiat Panda)
- Val di Sangro (Fiat Ducato, Peugeot Boxer, Citroën Jumper)
Other assembly plants in Italy (outside Stellantis):
- Macchia d’Isernia (DR Automobiles)
- Maranello (Ferrari)
- Sant’Agata Bolognese (Lamborghini)
” The mockery lies in the fact that in a few days, in Turin, we will witness the presentation of the Grande Panda, the heiress of a car that sold millions of units in its long career, but will not be manufactured in our city, noted before the July 11 ceremony by union leaders from the Mirafiori factory. We will also celebrate the 125 years of Fiat, but which should now be called FA, because the “I” of Italy and the “T” of Turin have disappeared “.
The Fiat Grande Panda, on which the brand has high hopes, will indeed be assembled in Kragujevac, Serbia, replacing the old Fiat 500L. Not great when you know that the coalition government between the right and the far-right hopes that Italy will produce a million vehicles per year by 2030.
Carlos Tavares’ responses
One after the other. It was now Carlos Tavares, CEO of Stellantis, who stood behind the lectern.
” The heart of Fiat has beaten here for 125 years and will continue long into the future ,” he declared before continuing with figures, like a centralien: ” For the third consecutive year, Fiat is the number 1 brand at Stellantis with 1.35 million vehicles sold (…) Fiat is number 1 in four markets, Italy, Brazil, Turkey, and Algeria “.
Interesting, but what about the made in Italy so dear to the minister? ” 70% of Fiat vehicles sold in Italy are made in Italy ,” explains Carlos Tavares. It should be noted here that the lion’s share goes to the previous generation of the Panda – now called Pandina – which will continue to come out of the Pomigliano d’Arco factory for a few more years. ” 59% of Fiat vehicles produced in Italy are exported, contributing to 63% of car exports from the country, supporting the trade balance ,” continues the former number 2 of Renault. Stellantis has 40,000 employees in Italy, accounting for 17% of the group’s workforce.
Carlos Tavares also mentioned the “Mirafiori Automotive Park 2030″ project. This site, which occupies a central place in Fiat’s history and Italian working culture, is expected to host gearbox manufacturing or a vehicle recycling unit. Above all, the upcoming launch of the new hybrid Fiat 500 on its lines (in addition to the electric version) should help alleviate the slowed-down production lines due to the stagnation of electric vehicle sales in Europe. ” This is a new commitment to Italy, summed up the Stellantis boss, we will win together “.
But that’s all. ” Global competition is strengthening. The status quo is not possible (…) Respect Fiat, because Fiat will still be here after us .”
Applause in the room.
Pressure and capital stakes
This does not end the standoff. The government led by Prime Minister Giorgia Meloni has made made in Italy one of its battle horses. This explains the symbolic “pressure” exerted on Stellantis since the beginning of the year. After the controversy, the Alfa Romeo Milano SUV made in Poland was renamed Junior.
And the government uses its customs prerogatives to support its cause. This brings us back to the immense port of Livorno, on the Mediterranean coast, where law enforcement seized Fiat Topolino cars in May labeled with the Italian flag, but assembled in Morocco. ” The title of made in Italy, governed by Article 517 and Article 4.49 of Law 350 of 2003 states that the title can only be used when the production chain is carried out in Italy,” recalled Fabio Rampelli, head of the Fratelli d’Italia group in the Chamber of Deputies at the time.
In addition, the executive’s desire is to have more influence on the decisions of the automotive group. Especially through capital means. Earlier this year, Minister Adolfo Urso had launched a trial balloon. Why couldn’t the Italian state enter the capital of Stellantis to have more weight in industrial decisions? Bpi France, the state-controlled investment bank in France, and our Caisse des dépôts et consignations, own 6% of the giant automotive group.
” No grazie ,” Stellantis made it clear. Furthermore, a significant stake in the group would cost the Italian state 4 billion euros, estimated by the Italian news agency Ansa last February . As the Italian sovereign debt is rated BBB- by the Fitch rating agency (“lower average quality”), this investment would likely not be made without difficulty.
