Debunking the persistent legend of Russo-Italian rust.
Fiat’s cooperation in the establishment of the VAZ factory, along with Alexei Kosygin’s new policies(1), helped mobilize the Soviet citizenry en masse. With the quite excellent Fiat 124 as a basis, the end-product was arguably a better car to own and drive than anything offered by ZAZ(2), AZLK(3) or GAZ(4) at the time.
The establishment of the VAZ factory was, as we now know, politically motivated(1). For the Soviet government at least, the project was a major success: they took a good initial design and successfully adapted it to their country’s conditions and needs. They even sold it successfully in export markets. For the Italians, though, things played out somewhat differently: this project would become part of a narrative that still haunts the entire Italian automotive industry, and this is precisely the issue we address in this final part of the series. As one would easily suspect, I am referring to the ‘inferior Soviet steel’ narrative that, until fairly recently, was almost universally accepted as fact.
A persistent narrative
According to this narrative, Fiat was paid by the Soviets in steel. More specifically, rusty, sub-par steel reclaimed from ship-breaking yards. The story goes on: this rusty, sub-par steel was used as raw material by Fiat in its own cars, and also in Lancia models such as the Beta, and even in Alfa Romeos, especially the Alfasud. This, along with other factors, caused Italian cars to rust profusely, far more than any other car built by any other manufacturer since 1960. As I said, this narrative was widely accepted as fact until fairly recently.
Where the narrative originated, I cannot be entirely sure. I have not been able to trace its roots and its beginnings to an original article or historical reference because I have never seen such a source being cited by any of the numerous automotive journalists and bloggers/vloggers who have incorporated it in their commentary over the years. Even today, prominent publications still include the ‘Soviet steel’ claim in their posts as fact(5)(6)(7). Only fairly recently has its veracity began being questioned in various forums, so perhaps the time has come to seek explanations for its proliferation.
Separating fact from conjecture
Before we examine the veracity and credibility of this narrative, we need to have a look at what this project represented. The VAZ factory was going to be a major investment. Business Week reported that the total cost was estimated to be as high as $800 million. The Istituto Mobiliare Italiano offered to finance $320 million, the amount that would be spent in Italy. The loan would be repayable eight and a half years after the delivery of the goods, and the interest rate would be approximately 6.5%. Of this $320 million, 65% to 75% would be spent on machine tools that would be purchased from Italian companies besides Fiat(8).
How would this huge loan be repaid? The prevailing narrative, of course, says ‘Why, the Soviets paid in sub-par, rusty steel reclaimed from ship-breaker yards.’ There are, however, several serious problems with this narrative, which we will examine below.
Trade balance implications and a ferrous deficit
First of all, as Vittorio Valletta, who was Fiat’s President when the VAZ factory was still in the discussion and negotiation stages, explained to US Secretary of State Dean Rusk, the “balance of trade between Italy and the USSR favored the latter.”(1) Would the Italian government be willing to allow this trade balance to be further shifted to the Soviet side and risk a severe backlash from the opposition? I doubt it.
Even if Saragat and his moderate socialist government were willing to bend over backwards to facilitate the Soviets, this option was a non-starter. The reason for this is simply that the Soviet Union could not produce enough ferrous metals, especially cold rolled steel, to satisfy its own needs(9) in the first place. Where would it find so much steel to supply to the Italians in repayment for the VAZ factory?
It doesn’t matter at all
Let us entertain the ‘Soviet steel’ narrative for a while, and accept the claim that the Soviets proposed to pay the Italians in steel, new and/or reclaimed from ship-breaking yards, or whatever other source they could come up with. Let us also accept that the Italians agreed to this arrangement, regardless of what it would do to the bilateral trade deficit. Does the origin of the raw material even matter? In a nutshell, no.
People recycled metals long before recycling became cool. Steel, in particular, is one of the most recycled materials in the world(10) and the steel industry has been actively recycling it for more than 150 years. It simply makes economic sense to do so: recycling steel is cheaper than mining iron ore and manipulating it through the production process to form new steel. The metal does not lose its physical properties during the recycling process, and the energy and material requirements, compared to refinement from iron ore, are drastically reduced: we are talking here about energy savings as high as 75%(11).
Now, to address the ‘quality’ issue: the quality of the initial material (i.e. impurities, poor refinement process, and so on) does not matter at all. After the scrap metal is melted, it goes through a purification process, which then allows the processing plant to create steel alloys of whatever quality is required(12). This is just how metallurgy works.
Finally, preventing rust comes down mostly to using corrosion-resistant (stainless) alloys where possible, or protecting the metal from the elements, painting being the obvious method. Galvanizing, a technique not widely used by car manufacturers before the 1980s, goes a long way towards achieving this goal. However, neither method will do much good if the car has places where water can get trapped for a long time, and if proper production procedures are not followed.
Soviet steel and Alfa Romeo
In response to a feature in the sixth issue (Autumn 2020) of The Road Rat magazine, automotive historian and fellow DTW contributor Matteo Licata pointed out that “[e]arly Alfasuds rusted prematurely due to poor working practices at the Pomigliano plant.”(13) He added that Achille Moroni, the engineer Alfa Romeo sent to solve the problem, recalled that “he found the roots to be the poor management of the electrophoresis vats, because of awful working relations and the workforce’s relative lack of experience. On top of that, micro-strikes on the line often led to moisture depositing on unpainted bodies during processing.”(13)
That Licata had to write to The Road Rat to set the record straight regarding the Alfasud’s rust problems is a worrying indication of how much the ‘Soviet steel’ narrative has clouded our understanding of Italy’s automotive history. So much so that even Andy Haslam, owner of the magnificently informative Big Car YouTube channel, attributed the Alfasud’s rust problems to the “low-quality Soviet steel,” in an otherwise excellent documentary on the small Alfa, adding that “inadvertently Fiat were lowering the quality of Alfa Romeo’s cars.”(14)
However, Alfa Romeo was under the Italian government’s control at the time, whereas Fiat was a private company. So, whatever deal Fiat made with the Soviet government created no obligation or benefit for Alfa Romeo. After all, the two companies were competitors until 1986, when Alfa Romeo was acquired by Fiat(15).
Soviet steel and Fiat’s other subsidiaries
Of course, since Fiat struck the Soviet deal, it should come as no surprise that the ‘Soviet steel’ narrative is associated with it. We have already established that the inclusion of Alfa Romeo in this narrative is historically dubious. Now, we are going to examine how the narrative affected the historical and journalistic coverage of its other subsidiaries. At the time, there were other Italian car manufacturers that could, or were obliged to use, Fiat’s supply of raw materials: Lancia, after its acquisition by Fiat in 1969(16), Autobianchi, which was acquired in 1968(17), and Ferrari, 50% of which was also acquired by Fiat in 1969(18).
Interestingly, Autobianchi and Ferrari seem to have been spared any connection to the ‘Soviet steel’ narrative. Lancia, on the other hand, has been subjected to over forty years of defamation by the automotive press until its name became a punchline. The Beta’s rust issues were covered in an almost hysterical manner(19). Numerous sources, well-meaning or not, have attributed them – without providing any evidence – to the alleged ‘Soviet steel’ barter(20). Over time, this one model’s issues became the poison that was methodically administered by automotive journalists in pretty much every article covering Lancia’s later cars, from the Trevi all the way to the third-generation Delta and Ypsilon, and the rebadged Chryslers that followed them.
Yet, there is a certain unevenness in this smear campaign. Typically, post-1980 features on Lancia included something along the lines of ‘Lancia, whose reputation was ruined by the rust-prone Beta that was made from cheap Soviet steel…’ But the Beta, which has been used as the stick with which car journalists have been beating Lancia since 1980(21), was not the only Lancia that was supposedly built with this ‘sub-par steel’: production of Fulvias, Flavias, and 2000s continued after 1970. In fact, the last 2000s rolled out in 1975, and the Fulvia Coupé was produced until 1976.
This gives us a three-year overlap with the production of the Beta’s first series, the one that was hit hardest by rust issues(19). It makes perfect sense to assume that this ‘sub-par Soviet steel’ that was supposedly the killer of the Beta and the Alfasud would also have been used on 2000s and Fulvias. Yet, whereas the Beta has been maligned as a ‘rust bucket’ over the past forty-two years, its contemporary 2000 and the third series of the Fulvia Coupé were spared this treatment.
An inexplicable(?) longevity
In general, non-automotive journalists and historians try to adhere to certain standards. First of all, they try to ensure that their story can be verified from as many credible sources as possible. The ‘Soviet steel’ narrative clearly fails both parts of this test: since its proponents and purveyors have never cited any specific source to back up their claims, much less a verifiable and credible one. It is pretty much an anecdote, and nothing more.
Furthermore, the narrative’s credibility takes three additional hits: as was established in this series, it made no fiscal or financial sense for the Italians to be paid in kind by the Soviet Union(1), and it was doubtful that the USSR could spare enough steel with which to pay the Italians(9) in the first place.
Also, self-respecting journalists and historians try to ensure that their narratives check out, chronologically and scientifically. One can only remember the long-standing, but historically inaccurate, claim that Charles de Gaulle, two years after his death, vetoed the alleged Citroën CX-Lancia Gamma joint venture(22). The ‘Soviet steel’ narrative suffers both chronologically and scientifically.
Chronologically, the narrative falls flat on its face regarding the attribution of the Alfasud’s rust issues to the use of ‘Soviet steel’. It is further discredited by the chronological overlap in the production timelines of the remaining ‘F-series’ Lancias (the Fulvia Coupé and the Flavia-derived 2000) and the first-series Beta. If the metal used was the primary contributing factor to Lancia’s rust problems, then shouldn’t the 2000 and the Fulvia Coupé also be dismissed and denigrated as ‘rust buckets made from rusty Bolshevik steel’? Or, given the well-documented sectarianism among Lancisti, do they get preferential and deferential treatment as ‘the last real Lancias™’? On the scientific front, it makes no sense at all, as it contradicts everything metallurgists and engineers are taught and put into practice regarding the production and recycling of steel.
Why has this narrative been allowed to survive and prevail for so long? I am inclined to attribute it to expediency. It is a convenient story: it provides a quick, blunt, sensational, and easy explanation of the matter, however inaccurate. This story fits the convictions and sympathies (including nationalist, ideological, and political) of many automotive journalists and their readers. Finally, we must consider the possibility that the writers who promoted and exploited this narrative were seeking to serve certain business interests.
Sources, quotations, and acknowledgements:
(1) Foreign Relations of the United States, 1964-1968, Volume XII, Western Europe, Italy, ed. James E. Miller (Washington: Government Printing Office, 2001), Document 114 [accessed 27th April 2022]
(2) ZAZ – Wikipedia
(3) AZLK – Wikipedia
(4) GAZ – Wikipedia
(6) Matt Bell – Ode of Remembrance : Classics World, 14th November 2018 [accessed 9th May 2022]
(7) Mark Wan – AvtoVAZ : Autozine.org [accessed 9th May 2022]
(8) The Fiat-Soviet Auto Plant, and Communist Economic Reforms: A Report Pursuant to House Resolution 1043, 89th Congress, 2nd Session, for the Subcommittee on International Trade, Committee on Banking and Currency, House of Representatives (Washington: Government Printing Office, 1967), p. 74 [accessed 7th May 2022]
(9) The Fiat-Soviet Auto Plant, and Communist Economic Reforms: A Report Pursuant to House Resolution 1043, 89th Congress, 2nd Session, for the Subcommittee on International Trade, Committee on Banking and Currency, House of Representatives (Washington: Government Printing Office, 1967), p. 23 [accessed 7th May 2022]
(13) Matteo Licata, 2021. AOB (Any Other Business). The Road Rat, issue 7 (Spring 2021) p.242
(14) Big Car – The Alfasud – Italy’s “Car of the decade” that ruined Alfa Romeo [Video]: YouTube, 21st May 2021 [accessed 10th May 2022]
(15) Roberto Suro – Company News; Fiat Best Ford In Bid For ALFA : New York Times, 7th November 1986
(16) Fiat Announces It Is Seeking Acquisition of Lancia Concern : New York Times, 22nd October 1969, p.69
(17) La Storia – Registro Autobianchi [accessed 11th May 2022]
(18) Fiat Acquiring Half Of Ferrari Concern : New York Times, 22nd October 1969, pp.55-56
(19) Deserving Beta (Part Two) – Daniel O’Callaghan : Driven To Write, 30th September 2021
(20) Lancia Beta – Wikipedia
(21) Alister Martin and Sydney Young – Luxury Cars In Rust Riddle : Daily Mirror, 9th april 1980, pp.1, 11
(22) The Phantom Joint Venture – Part One – Konstantinos Tzoannopoulos : Driven To Write, 13th January 2022