The Italian government
appears to be backing away from a confrontation with
Fiat over its dramatic new proposals to merge with
Chrysler Group in the next two to three years and to
shift its headquarters from Turin to Detroit in new
comments made by Minister for Labour, Maurizio Sacconi.
CEO Sergio Marchionne
unleashed a storm of controversy in remarks he made on
Friday night at the JD Power Automotive Roundtable
conference in San Francisco when he suggested that the
the two companies (currently Fiat owns 25 percent of
Chrysler Group) could merge in the near future and be
headquartered in the U.S., a strategy of consolidation
between the two companies that is seen by many in the
automotive industry as logical. While these remarks
caused newspaper headlines across Italy yesterday which
carried into this morning, Marchionne also shocked the
North American media at the conference by calling the
U.S. and Canadian state loans to Chrysler, "shyster"
loans, with a written apology being hastily issued.
In Italy though it was
the concept of moving Fiat's headquarters out of Turin,
where Fiat has been based since it was incorporated by a
group of investors that included Giovanni Agnelli in
July 1899, that caused waves with the Mayor of Turin
demanding "immediate clarification" and the opposition
party's spokesman for labour affairs describing the
plans as "worrying". Yesterday saw Marchionne, as well
as Fiat Chairman John Elkann, spinning out a new and
softer - although meaningless - line that the merged
Fiat-Chrysler entity would in fact have no less than
four 'global headquarters', and as well as Turin for
Fiat and Detroit for Chrysler, there would be centres in
Brazil and at an unnamed Asian location. They didn't
however say where the key power would lie in the future.
Also yesterday, the
AGI news agency reported that Italian Prime Minister
Silvio Berlusconi will meet Marchionne this week to
discuss the matter with the meeting also set be attended
by Finance Minister Tremonti, Labour Minister Sacconi,
Economic Development Minister Romani and the Cabinet
undersecretary Gianni Letta. Government officials and
Fiat executives got in touch with each other yesterday
to organise the meeting, although the exact date has yet
to be decided.
Sacconi is the key
figure in the government side as he holds the labour
portfolio, and he seemed to back away from confronting
Fiat over the plans, instead he hid behind the 20
billion euro "Fabbrica Italia" investment proposal and
suggested that the investments Fiat made in Italy in the
near future would be the present government's key
demand. "We have for some time hoped that Fiat will
integrate with other carmakers to achieve the scale
necessary to compete in the global market," Sacconi said
in an interview on the Mattino Cinque TV
programme, reported the Wall Street Journal this
morning.
"If there is a merger
between Fiat and Chrysler, I think the group will
inevitably have one headquarters in the U.S. and one in
Italy," the minister added, before voicing his view that
proposed investment plans for Italy, which have already
been set in motion for two plants (Mirafiori and
Pomigliano d'Arco) would be the most important issue for
the present government: "What matters insofar as Fiat's
roots in this country is that it carries out its planned
investments because these represent choices that can't
be reversed for a long time," Sacconi said.
