Amid reports suggesting Fiat will shortly abandon Italian car production, Driven to Write posits a requiem.
So it has come to this. After almost 120 years of car production, Fiat cars, for so long synonymous with the place of their birth will no longer be produced there. Yesterday, we examined Automotive News’ report outlining FCA’s plans to shift Fiat’s entire production output to low-cost outposts outside of Italy. Instead, Fiat’s domestic plants will be refitted to produce upmarket models as FCA transitions towards high-return product.
There is a certain inevitability to this of course, given both the pattern of FCA’s fortunes and the path the wider motor industry is taking, but regardless of the pragmatism of Sergio Marchionne’s decision, it can equally be read as a vote of no confidence in Fiat’s homeland. Grimly ironic too, in that it’s the small, economical cars for which the carmaker made its reputation that are proving its undoing.
Founded in 1899 upon principles of intellectual socialism, Fabbrica Italiana di Automobili Torino was one of the most potent symbols of the Italian industrial revolution, and post-WW2, of Italy’s rebirth following their crushing defeat and subsequent economic collapse. A powerhouse of enterprise, engineering talent and creative flair, Fiat were industrial pioneers with a distinctly humane ethos towards the social function of the motor car within Italian society. Fiat might have brought mobility to its homeland, but at their best did far more: They ennobled it.
The wealth of engineering talent which the Turin car business nurtured and disseminated encompasses most of the great names of the Italian automotive scene; giants like Jano, Zerbi, Becchia, Giacosa and Lampredi. But outside the automotive realm, Fiat also innovated – in aviation, commercial vehicles and agricultural machinery. In architecture too: Giacomo Matté-Trucco’s state of the art and elevatory Lingotto plant in Turin, was a technological and aesthetic marvel when it opened in 1920.
But in truth, Fiat was also a somewhat lopsided business. Over-reliant upon a protected home market, blind to more lucrative upmarket sectors and deaf to the notion of customer satisfaction. Even Fiat’s corporate logo was ill-defined and subject to almost constant reinvention. And if Fiat couldn’t adequately define its identity, what hope had it re-drawing anyone else’s?
Hubris too was a factor. Having acquired vast swathes of the failing domestic car industry amidst the contractions of the post-oil shock era, Fiat, in a manner similar to that of the god Saturn, consumed its adopted children one by one.
Too many Fiat Auto chiefs’ behaviour became more redolent of the Borgia dynasty than of professional managers, leading to a culture of boom and bust that punctuated the car maker’s fortunes over decades. But a forensic dissection of Fiat Auto’s decision making is for another time. Because surely the question now for Fiat’s Italian workforce, for its supplier base and for the wider domestic research and development businesses who rely upon them is one of quo vadis?
Italy’s economic and political woes are deep and possibly chronic. Its industrial might is spent and having failed to re-emerge from the privation and austerity of the post 2008 Eurozone collapse it appears to be drifting away from its predominantly post-war socialist ethos towards right-wing populism and protectionism. All of which makes manufacturing an even more parlous exercise, and adds further dimensions to the high-cost rationale being posited by FCA management.
Even with new models (allegedly) coming on stream, higher margin vehicles mean lower volumes, and that usually spells job losses. Furthermore, with the car production centre of gravity moving inexorably Eastwards it may prove expedient to shift ever-more of it in that direction. Ultimately, it might make more sense to produce Alfa Romeos in the US, given the stated importance of that Market to the brand.
Sergio Marchionne has vowed to eliminate FCA’s debt burden before he steps down next year. Central to this is his continued belief in a super-merger, ideally with another US carmaker, and one he’s moving heaven and earth to achieve. And with debt-reduction the primary goal, all actions, be they product-related or strategic can only be viewed through this narrow, restrictive prism.
There have never been icons or sacred effigies in the pragmatist church of Marchionne. FCA’s chief executive doesn’t go in for sentiment. By shifting Fiat’s car production east, FCA’s chief executive is subtly recasting his vow protecting Italy’s jobs and industry. Because what was once holy writ is more akin to what Roman Catholics describe as extreme unction, better known as last rites.
It will probably happen incrementally, but the death of Fiat as a European car brand now looks inevitable.
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